Union Cabinet gives nod for creation of two additional benches of the Authority for Advance Rulings (Income Tax)

Union Cabinet on 25 February 2015 gave nod for creation of two additional benches of the Authority for Advance Rulings (AAR- Income Tax).
This decision was taken in Union Cabinet meeting chaired by Prime Minister Narendra Modi in order to enable resident taxpayers to obtain an advance ruling in respect of their income tax liability above a defined threshold.
Two additional benches of the AAR will be established in New Delhi and Mumbai.
Implications of establishment additional benches of AAR

• Increase disposing of number of cases to reduce pendency of cases in order to benefit tax payer and the Government.
• Operationalise the facility of advance ruling for resident tax payers.
• Provide tax clarity in certain situations to the resident tax payers.

Along with this decision Union Cabinet also gave its approval
Creation of various posts:

• 2 posts of Vice-Chairmen in the Apex scale.
• 4 posts of Members (two posts of Revenue Members and two posts of Law Members) in the Higher Administrative Grade (HAG+).
• 2 posts of Secretary at the level of Commissioner of Income Tax/Joint Secretary.

Expenditure for establishment and running these two additional benches:

• Establishment: One time expenditure of Rs. 7.48 crores.
• Running: Annual recurring expenditure of Rs. 6.61 crores.

Background
As per the provisions of Income-Tax Act, 1961 AAR was constituted for advance rulings to settle income-tax liability
AAR provided the facility of settle income-tax liability of a non-resident and to plan their Income-tax affairs in advance in order to avoid long drawn and expensive litigation.

Month: Current Affairs - February, 2015