The government has amended income tax rules to end uncertainty over GAAR that is set to kick in from April 1, 2017.

The amended Income tax rules issued yesterday clearly provide that GAAR rules will not apply to FIIs in respect of their income from transfer of investment made before April 1, 2017, clearly laying down that it will be in force prospectively.

These general anti-avoidance rules, popularly called GAAR, seek to deny tax benefit to any arrangement entered only for the purpose of avoiding tax.
Tax experts had been calling for a prospective implementation of the rules.