Supervening Authority of General Anti-Avoidance Rules (GAAR)

The statutory General Anti-Avoidance Rules contained in Chapter X-A of the Income Tax Act, 1961, operate as an overreaching anti-abuse framework designed to counter impermissible avoidance arrangements. By virtue of non-obstante clauses and Section 90(2A), GAAR provisions override the beneficial provisions of double taxation avoidance agreements whenever an arrangement is structured primarily to obtain a tax benefit and lacks commercial substance. Rule 10U guidelines provide limited grandfathering to genuine passive investments made prior to April 1, 2017, but do not insulate complex arrangements or post-2017 income-generating share transfers from statutory anti-avoidance scrutiny.(The authority for advance rulings Vs Tiger Global International II holdings) | 2026 INSC 60)