Substance over form in tax avoidance shapes the contrast between judicial anti-avoidance rules and codified GAAR.

Judicial Anti Avoidance Rules (JAAR) are a judicial measure against tax avoidance based on the business purpose rule and the substance over form rule, while General Anti Avoidance Rules (GAAR) are a legislative and codified framework that standardises the anti-avoidance approach. GAAR has a wider scope and includes lack of commercial substance, such as round-trip financing, accommodating parties, offsetting transactions, and the impact on business risks, cash flows, assets, transactions, or residence. JAAR has no threshold limit, whereas GAAR applies only where the tax benefit exceeds the prescribed threshold.

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