The General Anti Avoidance Rules (GAAR) had first been introduced in the Direct Taxes Code (DTC) in 2009 to curb 'Impermissible Avoidance Arrangement' entered into by a person to avoid taxes. The GAAR had been introduced to deal with aggressive tax planning involving use of sophisticated structures.
Although originally forming a part of the DTC, now it is a part of the Income-tax Act, 1961. Under the current provisions, Chapter X-A, dealing with the provisions of GAAR would come into force with effect from 1 April 2015 (Financial Year 2015-16).
The Central Board of Direct Taxes has today notified the rules relating to application of GAAR.