Gaar

The banks point out to investors that routing investments through their Paris base, where they have existing structures in place, would cushion them against the impact of a sweeping revamp in Indian tax rules.

GAAR is a set of rules under which the tax department get the right to scrutinise transactions if they believe that they are structured for the purpose of avoiding taxes.

The latest FPI outflow followed withdrawal of close to Rs 77,000 crore on net basis from equity and debt together in past three months (October-December).

CBDT said that adoption of anti-abuse rules in tax treaties may not be sufficient to address all tax avoidance strategies and they are required to be tackled through domestic anti-avoidance rules.

Among expected measures are a hike in a transaction tax on stock derivatives trading and a less beneficial approach to long-term capital gains tax exemptions, according to analysts.

The clarifications are timely and helpful as they address some of the immediate concerns of the investor community, said Gokul Chaudhri, Leader, Direct Tax, BMR & Associates LLP.

In a clarification on implementation of GAAR, CBDT said the provisions will not apply if the tax benefits obtained are permissible under the limitation of benefits clause provided in tax treaties.

Investors in India are bracing for higher taxes and less incentives from the government's annual budget to be unveiled on Feb. 1 as the focus shifts to wringing out revenues to finance giveaways and higher public investments to support the economy.

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.

In a detailed memorandum to the Finance Ministry, the chamber said it is common for investors to gain economic exposure in Indian securities through P-notes.

To clear the air on retrospective applicability of the General Anti-Avoidance Rule (GAAR), the Income Tax Department has said the same will not apply to income from transfer of investments before April 1, 2017.

Finance Ministry on Thursday met representatives of foreign portfolio investors (FPI) and deliberated on their concerns over taxation against the backdrop of India signing revised tax treaty with Mauritius this week.

A day after the revision of bilateral tax treaty with Mauritius, the finance ministry on Wednesday said GAAR provisions, which are to take effect from April next year, will override the double taxation avoidance agreements (DTAA) provisions in case they are abused.

Revenue Secretary Hasmukh Adhia told reporters that the international community is supporting GAAR.

Japanese investors remain "very positive" on India, saying there is a big opportunity for placing "significant" foreign direct investment (FDI) here if the country can sort out some of its tax issues, a top official of financial services major Nomura has said.

The banks point out to investors that routing investments through their Paris base, where they have existing structures in place, would cushion them against the impact of a sweeping revamp in Indian tax rules.

GAAR is a set of rules under which the tax department get the right to scrutinise transactions if they believe that they are structured for the purpose of avoiding taxes.

The latest FPI outflow followed withdrawal of close to Rs 77,000 crore on net basis from equity and debt together in past three months (October-December).

CBDT said that adoption of anti-abuse rules in tax treaties may not be sufficient to address all tax avoidance strategies and they are required to be tackled through domestic anti-avoidance rules.

Among expected measures are a hike in a transaction tax on stock derivatives trading and a less beneficial approach to long-term capital gains tax exemptions, according to analysts.

The clarifications are timely and helpful as they address some of the immediate concerns of the investor community, said Gokul Chaudhri, Leader, Direct Tax, BMR & Associates LLP.

In a clarification on implementation of GAAR, CBDT said the provisions will not apply if the tax benefits obtained are permissible under the limitation of benefits clause provided in tax treaties.

Investors in India are bracing for higher taxes and less incentives from the government's annual budget to be unveiled on Feb. 1 as the focus shifts to wringing out revenues to finance giveaways and higher public investments to support the economy.

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.

In a detailed memorandum to the Finance Ministry, the chamber said it is common for investors to gain economic exposure in Indian securities through P-notes.

To clear the air on retrospective applicability of the General Anti-Avoidance Rule (GAAR), the Income Tax Department has said the same will not apply to income from transfer of investments before April 1, 2017.

Finance Ministry on Thursday met representatives of foreign portfolio investors (FPI) and deliberated on their concerns over taxation against the backdrop of India signing revised tax treaty with Mauritius this week.

A day after the revision of bilateral tax treaty with Mauritius, the finance ministry on Wednesday said GAAR provisions, which are to take effect from April next year, will override the double taxation avoidance agreements (DTAA) provisions in case they are abused.

Revenue Secretary Hasmukh Adhia told reporters that the international community is supporting GAAR.

Japanese investors remain "very positive" on India, saying there is a big opportunity for placing "significant" foreign direct investment (FDI) here if the country can sort out some of its tax issues, a top official of financial services major Nomura has said.