# Tax anti-avoidance rule GAAR will kick in from April 1, 2017.
# In May last year, CBDT had started consultation with stakeholders asking them to give their views where they require clarity before GAAR is implemented.
# General Anti-Avoidance Rule (GAAR) was part of the 2012-13 Budget speech of the then Finance Minister Pranab Mukherjee to check tax evasion and avoidance.
# However, its implementation was repeatedly postponed because of the apprehensions expressed by foreign investors.
# It contains provision allowing the government to prospectively tax overseas deals involving local assets.
# There have been fears that the government may use it to target P-Notes.
# Through the use of GAAR, government may try to tax P-Notes as indirect investments, which could attract a tax rate of up to 15 per cent, experts say.
# To avoid tax altogether under GAAR, an investor may have to prove that P-Notes were not set up specifically to avoid paying taxes.
Quick Question for Bank PO/ IBPS Exams 2016-17:
What is the full form of GAAR?
-General Anti-Avoidance Rule (GAAR).