Finance Minister P Chidambaram said the modified provisions under the General Anti-Avoidance Rules (GAAR) would be implemented from April 1, 2016. The GAAR, aimed at companies and investors routing money through tax havens such as Mauritius, had earlier been scheduled for implementation from April, 2014. According to the proposed rules, investments made before August 30, 2010, will not attract tax provisions under the rules. They will apply to investors who route through tax-havens. India gets nearly 40 per cent of its total foreign direct investment inflows through Mauritius, besides large portfolio investments.
In January, the minister had clarified that the anti-avoidance rules will not apply to foreign funds that were not taking tax benefits from India's various tax treaties with other nations. The rules will also not apply to non-resident Indians running foreign funds.
India's moves to toughen tax collection last year triggered an outcry from global industry groups and were blamed for a fall in investment flows into India. Prime Minister Manmohan Singh set up a panel to look at ways of addressing their concerns.
In January, the minister had clarified that the anti-avoidance rules will not apply to foreign funds that were not taking tax benefits from India's various tax treaties with other nations. The rules will also not apply to non-resident Indians running foreign funds.
India's moves to toughen tax collection last year triggered an outcry from global industry groups and were blamed for a fall in investment flows into India. Prime Minister Manmohan Singh set up a panel to look at ways of addressing their concerns.