GAAR, GST can impact your compensation

Your employer might need to relook at the salary structure to comply with the new changes in laws

The salaried class accounts for the bulk of the total collection of the individual income tax. More than 50 per cent of the income declared in individual tax returns are by this class. The government has introduced new provisions under the General Anti-Avoidance Rule (GAAR) and goods and services tax (GST) that can impact salaries.

GAAR addresses arrangements and structures made only to save tax. These apply to every resident taxpayer, including individuals, Indian companies or foreign investors. The income tax department can, therefore, disallow arrangements if it feels these were made to avoid tax, and it can even levy interest