New Delhi: Finance Minister P. Chidambaram on Monday said the implementation of General Anti Avoidance Rules (GAAR) has been deferred by two years.
Chidambaram said that the Government has accepted major recommendations of the Shome Committee on GAAR with some modifications.
"Having considered all the circumstances and relevant factors, government has also decided that the provisions of chapter 10A will come into force with effect from April 01, 2016 as against the current provision of April 1, 2014," he told the media here.
Chidambaram said that GAAR will not apply to those Foreign Institutions Investors, FIIs who are not taking any benefit under an agreement under the Income Tax Act.
"The investor and an FII (Foreign Institutional Investor) and the FII investing in India, the non-resident investor in FII will not be covered by GAAR," he said.
Chidambaram said the modifications have been fair and in the interest of investors.
"The modifications that we have done are fair, non-discriminatory, just and strike a balance between interest of revenue and the interest of investors. So, all apprehensions should now be set addressed," he said.
According to reports, the panel headed by Dr. Parthasarathi Shome had submitted its report in September last year. It had recommended that companies should be retrospectively taxed only in the rarest of rare cases.
The setting up of the panel was approved in July last year by the Prime Minister Dr. Manmohan Singh in the wake of representations against some of the provisions of GAAR.