New Delhi: The Prime Minister-appointed Shome Committee on Saturday submitted its second draft General Anti Avoidance Rules (GAAR) recommendations to Finance Minister P Chidambaram, whereby he proposed delaying the implementation of GAAR by three years.
The Committee, headed by Parthasarathi Shome, suggested abolishing Capital Gains Tax on listed securities and distinguishing tax mitigation from tax avoidance, among others.
The panel in its report proposed that GAAR should apply from assessment year 2017-18.
Key points of the Shome Committee report
- Abolish capital gains tax on listed securities
- GAAR should apply from assessment year 2017-18
- GAAR not to apply to payment of dividends and buybacks
- Tax mitigation be distinguished from tax avoidance
- GAAR not to be applied to setting up branches/subsidiaries
- GAAR not to apply to funding through debt/equity
- GAAR not to be invoked in intra-group transactions
- GAAR applicable in cases of false, abusive, contrived arrangements