GAAR exemptions cover qualifying FIIs, non-resident derivative investments, low-value tax benefits, and grandfathered pre-2017 investments

GAAR does not apply where the aggregate tax benefit to all parties does not exceed Rs. 3 crore, or where eligible FIIs satisfy the requirements of assessment under the Income-tax Act, non-claiming of applicable treaty benefits, and compliant investment in listed or approved unlisted securities. Exemptions also cover qualifying non-residents investing in FIIs through offshore derivative instruments or similar arrangements. Investments made before 1 April 2017 receive grandfathering protection, while GAAR applies to arrangements producing tax benefits on or after that date irrespective of when entered into.

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