|Chennai||Rs. 28730.00 (1.13%)|
|Mumbai||Rs. 29740.00 (-0.13%)|
|Delhi||Rs. 29200.00 (0%)|
|Kolkata||Rs. 29350.00 (0%)|
|Kerala||Rs. 28000.00 (0%)|
|Bangalore||Rs. 28400.00 (0%)|
|Hyderabad||Rs. 28470.00 (-0.11%)|
The General Anti-Avoidance Rule (GAAR), approved under the Finance Act, will be part of the Direct Taxes Code (DTC) Bill to be tabled in the monsoon session of Parliament. The finance ministry plans to implement both GAAR and DTC from April 1, 2013. However, if the implementation of DTC is again deferred, the government will introduce GAAR under the Income Tax Act next year.
The Finance Act, introducing GAAR provisions to check cases of tax avoidance, has already been cleared by Parliament. However, DTC, which is set to replace the 50-year-old Income Tax Act, is yet to be tabled in Parliament. This would be done after incorporating the suggestions of the standing committee on finance.
“The GAAR provisions approved by Parliament will be made part of DTC. The approval of the legislature will be sought for other provisions of the DTC,” said a finance ministry official, adding GAAR would be introduced from April 2013, any delay in the roll-out of the DTC notwithstanding.
The finance ministry had originally proposed GAAR provisions under the DTC, which were likely to come into effect from April 2012. While implementation of the DTC was deferred by a year, the ministry had proposed to introduce some of its provisions, including GAAR, from this financial year.
The date of implementation of GAAR was deferred, as these provisions led to protests from foreign investors who feared their investments in India through tax havens would now become taxable. Some GAAR provisions were also diluted, in line with the recommendations of the standing committee.
To address concerns of investors, the government said the onus to prove tax avoidance would be on the tax department, not on the taxpayer, as proposed earlier. It also agreed to include a non-tax officer in the three-member panel that would approve the invocation of GAAR provisions.
“I will have the opportunity after the Budget session is over, to go through all the recommendations (of the standing committee), and after approval of the Cabinet, bring the DTC Bill for approval of the both the Houses in the next monsoon session,” Finance Minister Pranab Mukherjee had told the Rajya Sabha this week.
Officials said if the Bill was tabled in the monsoon session, it could be put to effect in the next financial year, provided it was passed in Parliament. Though Mukherjee said many recommendations of the committee, headed by Bharatiya Janata Party leader Yashwant Sinha, would be accepted, a delay in approving the Bill by Parliament could put its date of implementation in jeopardy.