Govt to disclose final draft of GAAR in 10 days
The draft rules on general anti-avoidance rules (GAAR) prepared by an expert committee chaired by Parthasarathi Shome is sent to the prime minister and a final decision would be made public in 10 days.
This information was given by Finance Minister P Chidambaram. The Shome committee suggested that the controversial rules be deferred until 2016-17 and that safeguards be put in place to ensure that taxpayers are not harassed by the rules that seek to deny tax benefit to any business arrangement entered solely for the purpose of avoiding taxes.
Foreign investors fear that the rule would cause excessive scrutiny by the tax department. The government then deferred the implementation by a year and later set up a committee under tax expert Parthasarathi Shome to review the draft rules put out by the finance ministry.
The committee has also proposed that capitals gains arising out of transactions in listed securities executed on stock exchanges not be taxed.
Though the I-T department is believed to have opposed any further delay in implementation of the rules, the government would be worried about the potential impact on investors' sentiment if it does not accept the committee's report.