The Telangana High Court recently supported the General Anti-Avoidance Rules (GAAR), ruling against a taxpayer by stating that colourable devices should not be used in tax planning.
About General Anti-avoidance Rule (GAAR):
- GAAR empowers tax authorities to deny tax benefits for transactions or arrangements that lack commercial substance and are solely aimed at gaining tax advantages.
- These rules, which came into effect on April 1, 2017, are outlined under the Income Tax Act, 1961.
Ref: Source
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