Question

Consider the following statements with respect to General Anti Avoidance Rules (GAAR) :

1. GAAR was initially proposed as part of Direct tax code.
2. GAAR is for tax evasion and not avoidance.

Select the correct statement/s from above .

• A. 1 only
• B. None of the above
• C. 2 only
• D. Both 1 and 2

Answer 1

The correct option is A 1 only

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> The General Anti-Avoidance Rule (GAAR) is set of rules under the Income Tax Act which empowers the revenue authorities to deny tax benefits transactions or arrangements which do not have any commercial substance or consideration other than achieving the tax benefit. It is an anti-tax avoidance law in India. It came into effect on 1st April 2017.GAAR was initially proposed in the Direct Tax Code 2009, although it was introduced into India in the Budget session of Parliament in 2012.

It was introduced in India after the Vodafone deal with Hutchison-Essar.