GAAR AND TREATIES LEGAL FRAMEWORK

AUTHOR – LALIT RAJ P, STUDENT AT AMITY UNIVERSITY NOIDA

BEST CITATION – LALIT RAJ P,GAAR AND TREATIES LEGAL FRAMEWORK, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (8) OF 2026, PG. 50-56, APIS – 3920 – 0001 & ISSN – 2583-2344.

The fact that the legal system about the General Anti-Avoidance Rule (GAAR) in India and in other countries is a giant leap towards addressing the issue of tax avoidance and yet remain capable of being fair and certain in the taxation process. GAAR is supposed to be a broad, principle based provision that will enable the tax authorities to deny tax benefits that would otherwise arise due to arrangements lacking a real commercial substance and which are primarily designed to avoid taxes. It has a legal basis in the understanding that certain anti-avoidance regulations are not adequate in dealing with increasingly complex tax evasion schemes. This has seen GAAR become a critical part of the current tax structures, even in other parts of the world.^[1][2]

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[1] Income Tax Act, 1961, Chapter X-A, ss 95–102, inserted by Finance Act, 2012; effective from 1 April 2017 vide Notification S.O. 1188(E). See also Parthasarathi Shome Committee, ‘Report on General Anti-Avoidance Rules (GAAR) in Income Tax Act, 1961’ (Ministry of Finance, 2012).

[2] Judith Freedman, ‘Interpreting Tax Statutes: Tax Avoidance and the Intention of Parliament’ (2007) 123 Law Quarterly Review 53, 72; John Tiley, ‘Revenue Law’ (7th edn, Hart Publishing, 2012) 96–112.