Government notifies GAAR
The Union government of India notified GAAR (General Anti Avoidance Rules).
It is aimed at curbing tax avoidance by investors routing their funds through tax havens. GAAR will come into force from April 1, 2016. It will be applicable to entities availing tax benefit of at least Rs. 3 crore. It will scrutinize Foreign Institutional Investors (FIIs) that have claimed benefits under any Double Tax Avoidance Agreement (DTAA).
GAAR will not cover investments made by a non-resident by way of overseas derivative instruments or P-Notes through FIIs and investments made before August 30, 2010.