What is full form of GAAR ?  or What is GAAR ?

 The full form of GAAR is : General Anti-Avoidance Rules

What is GAAR in simple terms ?

 Tax Avoidance is an area of concern across the world.  The rules are framed in different countries to minimize such avoidance of tax.  Such rules in simple terms are known as  " General Anti Avoidance Rules "  or GAAR.   Thus GAAR is a set of general rules enacted so as to check the tax avoidance.

  

Why News for GAAR has been prominent in India in recent times ?

News for GAAR has been in prominence in last few years as Indian Government has taken initiative to introduce GAAR or General Anti Avoidance Rules with a view to increase tax collections.

GAAR in India  (Chronology of GAAR controversy in India)

In India, the real discussions on GAAR came to light with the release of draft Direct Taxes Code Bill (popularly known as DTC 2009) on 12th August 2009.  It contained the provisions for GAAR.  Later on the revised Discussion Paper was released in June 2010, followed by tabling in the Parliament on 30th August, 2010, a formal Bill to enact the law known as the DirectTaxes Code 2010.  The same was to be made applicable wef 1st April, 2012.   However, owing to negative publicity and pressures from various groups, GAAR was postponed to at least 2013, and was likely to be introduced alongwith the Direct Tax Code (DTC) from 1st April 2013.   Moreover, an Expert Committee has been set by Prime Minister (Manmohan Singh) in July 2012 to vet and rework the GAAR guidelines issued in June 2012.   The latest reports (September 2012) indicates, it may not be implemented even for 3 years i.e. this will be postponed for 3 years (2016-17).   Some of recent developments about GAAR are :-

   

    (a) 16th March, 2012 : Finance Minister, Pranab Mukherjee takes a tough stand and announces that the government will crack down on tax avoidance effective from fiscal year 2012-13

    (b) 7th May, 2012 : Finance Minister, Pranab Mukherjee forced to eat his words and agreed to defer GAAR by a year as his announcements spooked oversea investors

    (c) 28th June, 2012 : Finance Ministry releases first draft on GAAR;   There is wide criticism of the provisions.

    (d) 14th July, 2012 : PM, Manmohan Singh, forms review committee under Parthasarathi Shome, for preparing a second draft by 31st August and final guidelines by 30th September, 2012

    (e) 1st September, 2012 : Shome Committee recommends to defer GAAR by three years.   It also recommends some more investor friendly measures

    (f) 14th January, 2013 : GoI partially accepts the recommendations of Shome Committee and has decided to defer the same for 2 years and will now be effective from the year 2016-17