Section 184: interpretation - key definitions for the GAAR chapter

Accommodating party, arrangement and asset

• "Accommodating party" means a party to an arrangement whose direct or indirect participation, in whole or part, has as its main purpose obtaining a tax benefit (but for Chapter XI) for the assessee, whether or not that party is a connected person to any other party.
• "Arrangement" means any step in, or a part or whole of, any transaction, operation, scheme, agreement or understanding, whether or not enforceable, and includes alienation of property in such a transaction, operation, scheme, agreement or understanding.
• "Asset" includes property, or right, of any kind.
• "Benefit" includes a payment of any kind, whether in tangible or intangible form.

Connected person

"Connected person" means a person connected directly or indirectly to another person, and includes:

• any relative, if the person is an individual;
• any director of the company, or their relative, if the person is a company;
• any partner or member of a firm/AOP/BOI, or their relative, if the person is a firm, AOP or BOI;
• any member of the HUF, or their relative, if the person is a Hindu undivided family;
• any individual with a substantial interest in the person's business, or their relative;
• a company, firm, AOP/BOI (incorporated or not) or HUF with a substantial interest in the person's business, or any director/partner/member of it, or their relative;
• a company, firm, AOP/BOI (incorporated or not) or HUF whose director, partner or member has a substantial interest in the person's business, or their relative;
• any other person carrying on a business, where the individual (or their relative) or the company/firm/AOP/BOI/HUF (or its director/partner/member, or their relative) has a substantial interest in that other person's business.

Fund, party, relative and step

• "Fund" includes cash, cash equivalents, and any right or obligation to receive or pay cash or a cash equivalent.
• "Party" includes a person or a permanent establishment that participates or takes part in an arrangement.
• "Relative" has the meaning assigned to it in Section 92(5)(g).
• "Step" includes a measure or an action, particularly one in a series taken to deal with or achieve a particular thing or object in the arrangement.

Substantial interest in a business

A person is deemed to have a substantial interest in a business if: where the business is carried on by a company, that person is, at any time during the financial year, the beneficial owner of equity shares carrying at least 20% of the voting power; or in any other case, that person is, at any time during the financial year, beneficially entitled to at least 20% of the profits of the business.

Tax benefit and tax treaty

"Tax benefit" includes:

• a reduction, avoidance or deferral of tax or other amount payable under the Act;
• an increase in a refund of tax or other amount under the Act;
• a reduction, avoidance or deferral of tax or other amount that would be payable under the Act as a result of a tax treaty;
• an increase in a refund of tax or other amount under the Act as a result of a tax treaty;
• a reduction in total income; or
• an increase in loss, in the relevant tax year or any other tax year.

Tax treaty

"Tax treaty" means an agreement referred to in Section 159(1) or (2).

Frequently asked questions