No change likely in short-term cap gains tax on listed securities, STT
However, with minor modifications to make it more acceptable to foreign investors, GAAR may be implemented by 2014-15. The year in which the revised GAAR will have an impact on the tax outgo of investors will be the next financial year. The Shome committee draft submitted on September 1 had recommended that significantly diluted GAAR provisions should be implemented only by fiscal 2016-17 (assessment year 2017-18).
Currently, there is no long-term capital gains tax on listed securities in India while short-term gains are taxed at 10-30% depending on the class of investors.
GAAR, which has examples in many other jurisdictions, was proposed in the Finance Act, 2012, and was meant to thwart tax avoidance by firms by creating structures lacking business rationale.
This had raised fears among the investor community, promoting Prime Minister Manmohan Singh to set up the Shome panel.
The committee's first draft also proposed a major dilution in the original intention of taxing investments from Mauritius-based entities and said that if a limitation of benefit clause is part of the tax treaty with
Be the first to comment.
