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Income Tax Act, 1962 (Act 58 of 1962)

Chapter III: General Provisions

Part II: Assessments

Part IIA

80A. Impermissible tax avoidance arrangements

 

 

An avoidance arrangement is an impermissible avoidance arrangement if its sole or main purpose was to obtain a tax benefit and—

(a)        in the context of business—

(i) it was entered into or carried out by means or in a manner which would not normally be employed for bona fide business purposes, other than obtaining a tax benefit; or
(ii) it lacks commercial substance, in whole or in part, taking into account the provisions of section 80C;
(b) in a context other than business, it was entered into or carried out by means or in a manner which would not normally be employed for a bona fide purpose, other than obtaining a tax benefit; or

(c)        in any context—

(i) it has created rights or obligations that would not normally be created between persons dealing at arm’s length; or
(ii) it would result directly or indirectly in the misuse or abuse of the provisions of this Act (including the provisions of this Part).