GAAR And New Developments

Nowadays GAAR has become one of the most discussed and talked about topic in Indian Tax Environment. GAAR or General Anti- Avoidance Rules are expected to have long term and widespread effect. Whenever any change of massive magnitude, such as GAAR is proposed or introduced, there are bound to be discussions, oppositions, however affect of a new legislation/amendment should be analysed as a whole to access its overall impact.

Need for GAAR

There is a difference between Tax Evasion, Tax Mitigation and Tax Avoidance. Tax Mitigation is permitted by Law; it means to apply provisions of law to minimize effect of Taxation or in other words tax structuring is within four corners of law and hence permitted. Tax Evasion is completely outside the ambit of Tax Law and hence not permitted. Tax avoidance is restructuring financial position of an individual or entity in such a way as to lower its Income tax liability. Tax avoidance, like tax evasion, seriously undermines the