Last Updated on: April 1, 2026Section 179 Income Tax Act 2025
Impermissible avoidance arrangement.
36 179. 37 (1) An impermissible avoidance arrangement means an arrangement, the main purpose of which is to obtain a tax benefit, and it—
| (a) | | creates rights, or obligations, which are not ordinarily created between persons dealing at arm’s length; |
| (b) | | results, directly or indirectly, in the misuse, or abuse, of the provisions of this Act; |
| (c) | | lacks commercial substance or is deemed to lack commercial substance under section 180, in whole or in part; or |
| (d) | | is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes. |
(2) An arrangement shall be presumed, unless it is proved to the contrary by the assessee, to have been entered into, or carried out, for the main purpose of obtaining a tax benefit, if the main purpose of a step in, or a part of, the arrangement is to obtain a tax benefit, irrespective of the fact that the main purpose of the whole arrangement is not to obtain a tax benefit.