GAAR changes almost finalised: Chidambaram

Amendments to General Anti-Avoidance Rules (GAAR), the controversial law against avoiding taxation by carrying out transactions abroad, have been finalised, finance minister P Chidambaram said on Sunday.

"I have finalised the amendments to the Chapter 10A of the Income Tax Act. Now it will go to the PMO and then we should be ready with the amendments and then the GAAR rules will reflect the amended Chapter 10A. That is under preparation and I think the work is almost complete,'' Chidambaram said in an interview with PTI.

''The drafting work is complete. So, GAAR is under control. I have taken the decisions, subject to prime minister's approval and then the cabinet," he said in the interview. Chapter 10A of the Income Tax Act deals with taxation of investments.

GAAR, which was proposed in the 2012-13 Budget with a view to prevent tax evasion, evoked sharp reactions from foreign as well as domestic investors who feared that giving unbridled powers to taxmen would result in harassment of investors. The government later appointed a committee headed by tax expert Parthasarthi Shome to look into their concerns.

Chidambaram, during the interview, spoke on a variety of subjects including his optimism on meeting disinvestment and spectrum sales target, confidence on pushing through with reform measures and the government's relationship with the Reserve Bank of India, which he said was not antagonistic.

On the issue relating to retrospective tax amendment on which the Shome Committee had submitted its report, he said: "The CBDT (Central Board of Direct Taxes) has given its views. I have taken decisions at my level. The drafting is going on. Again it will go to the PMO (Prime Minister's Office) and then to the cabinet."