On 27 January 2017, the CBDT has issued Circular No. 7 of 2017 and provided important clarifications on the implementation of GAAR which are to come into force from 1 April 2017. The Circular provides clarifications, considering the comments of the working group constituted by CBDT, on the queries received by CBDT about an implementation of GAAR provisions. The rules are framed mainly to minimise and check avoidance of tax. Accordingly, India will be the 17th nation in the world to have laws that aim to close tax loopholes.
The General Anti-Avoidance Rule (GAAR) provisions shall be effective from the Assessment Year 2018-19 onwards (i.e. Financial Year 2017-18 onwards).
