General anti-avoidance rules permit scrutiny of arrangements, including individual steps, to identify impermissible avoidance structures.

General anti-avoidance rules empower the tax authorities to examine any arrangement and declare it an impermissible avoidance arrangement if the statutory conditions are met, with tax consequences then determined under the GAAR chapter. The provisions apply to the arrangement as a whole and also to any step in, or part of, the arrangement. "Arrangement" is broadly defined to cover any transaction, operation, scheme, agreement or understanding, whether enforceable or not, including alienation of property, and "step" includes a measure or action taken as part of the arrangement.

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