GAAR - A Boom Boom Provision.
General Anti Avoidance RuleMainly GOI took the stern step through after the Supreme Court's Verdict in "Suprasidh" Vodafone Case. - All tax plannings cannot be said to be illegal / illegitimate or impermissible. Genuine strategic tax planning is permissible.SO now this will target any transaction or business arrangement that is entered into with the objective of avoiding tax. Thus once GAAR is invoked, it would mean that particular transaction or arrangement would be impermissible and denied the tax benefit it has claimed.
Earlier provisions of GAAR - Immense authority to the Income Tax officials to target any business deal which seems to be tax evasive. No bilateral treaty will sconce the Tax provision.The party will held as Guilty and the burden of proof will rest on the party itself.
Now the anti - GAAR arguments --no tax treaty will protect the interests of investors thus also breach the respect of the treaties and will hamper the relations. -Will cause huge corruption as Business will go on the whims and fancies of the Tax Officials. ( "Though it is working in India even right now he he he ").-Burden of proof lies with the party as it means to held the party guilty as criminal. In regular cases the perpetrator treated as innocent unless he/ she be convicted. " awesome Raja and Kanimozi etc etc ."
Now Benefits of GAAR - - will stop use of treaty assigner countries as Tax Haven e g : Mauritius.- Will recover huge amount of Tax and help to maintain fiscal deficit. ( so that more Scam could be possible and we could Top the world in Scams ). :-)
Refurbish the main provisionsAzeemoshaan Shehenshaah - GAAR.- Tax Officials have authority to issue notice to party exceeding taxable income.- GAAR will apply only when tax benefit exceeds Rs 3 crore - It will apply only to investments made after August 30, 2010- It will not apply to non-resident investors in FIIs.- The Tax Authorities apply GAAR to those who invest in India through them ( FIIs).- treaty benefits will be available to residents of the country and not those who use to route to save tax.
- Same income will not be taxed twice by invoking GAAR "( wow humein to pata hi nahin tha)"- Where SAAR and GAAR both apply, only one will be invoked.
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