5. Consider the statements:
i) General anti-avoidance rule (GAAR) is an anti-tax avoidance Rule of India.
ii) It is framed by the Department of Revenue under the Ministry of Finance.
Which of the above statements is /are correct?
5. Consider the statements:
i) General anti-avoidance rule (GAAR) is an anti-tax avoidance Rule of India.
ii) It is framed by the Department of Revenue under the Ministry of Finance.
Which of the above statements is /are correct?
The correct option is C c) Both i and ii
C) Explanation:
General anti-avoidance rule (GAAR) is an anti-tax avoidance Rule of India. It is framed by the Department of Revenue under the Ministry of Finance.
The regulation allows tax officials to deny tax benefits, if a deal is found without any commercial purpose other than tax avoidance. It allows tax officials to target participatory notes. Under GAAR, the investor has to prove that the participatory note was not set to avoid taxes. It also allows officials to deny double taxation avoidance benefits, if deals made in tax havens like Mauritius were found to be avoiding taxes
c) Both i and ii
C)
Explanation:
General anti-avoidance rule (GAAR) is an anti-tax avoidance Rule of India. It is framed by the Department of Revenue under the Ministry of Finance.
The regulation allows tax officials to deny tax benefits, if a deal is found without any commercial purpose other than tax avoidance. It allows tax officials to target participatory notes. Under GAAR, the investor has to prove that the participatory note was not set to avoid taxes. It also allows officials to deny double taxation avoidance benefits, if deals made in tax havens like Mauritius were found to be avoiding taxes
