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of <h1>Tax Authorities Gain Expanded Powers to Challenge Artificial Transactions Under New GAAR Provisions in Income Tax Bill 2025</h1> Concise Legal Summary (100 words):Clause 179 of the Income Tax Bill, 2025 addresses impermissible tax avoidance arrangements under the General Anti-Avoidance Rule (GAAR). The provision empowers tax authorities to challenge transactions primarily designed to obtain tax benefits through artificial or non-commercial means. It establishes four key tests to determine tax avoidance: arm's length principle, misuse of law, lack of commercial substance, and non-bona fide manner. The clause shifts evidentiary burden to taxpayers, requiring them to demonstrate legitimate business purposes. Substantively similar to Section 96 of the previous Income Tax Act, it maintains continuity in the anti-avoidance legal framework while providing robust mechanisms to prevent aggressive tax planning strategies.
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