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CA Final Anti-avoidance Provisions — practice questions

Explore 65 free Anti-avoidance Provisions questions in CA Final Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Anti-avoidance Provisions questions and exercises with answers

Showing questions 1–30 of 65.

In which Chapter of the Income-tax Act, 1961 is the General Anti-Avoidance Rule placed?Read the answer and worked solution →Which section declares that an arrangement may be treated as an impermissible avoidance arrangement?Read the answer and worked solution →Which section defines an impermissible avoidance arrangement?Read the answer and worked solution →Under GAAR, which section lists when an arrangement is deemed to lack commercial substance?Read the answer and worked solution →Which GAAR section deals with the tax consequences once an arrangement is declared impermissible?Read the answer and worked solution →Which GAAR section covers the treatment of a connected person and an accommodating party?Read the answer and worked solution →In Chapter X-A, which section contains the definitions of terms like arrangement and tax benefit?Read the answer and worked solution →The main purpose test asks whether the arrangement mainly aims to:Read the answer and worked solution →How many tainted elements are listed in section 96(1)?Read the answer and worked solution →Which of these is a tainted element under section 96(1)?Read the answer and worked solution →Under section 96(1), an arrangement that results in misuse or abuse of the Act's provisions falls under which clause?Read the answer and worked solution →Which clause of section 96(1) covers means not ordinarily employed for bona fide purposes?Read the answer and worked solution →If one step mainly aims at tax benefit, the whole is presumed so, unless:Read the answer and worked solution →Which is deemed to lack commercial substance under section 97?Read the answer and worked solution →A party is an accommodating party if it mainly helps to:Read the answer and worked solution →Can an accommodating party be unconnected with the other parties?Read the answer and worked solution →Section 97(1)(a), where substance differs from form, codifies which doctrine?Read the answer and worked solution →Lack of commercial substance: no significant effect on business risks or:Read the answer and worked solution →Which fact is relevant but not sufficient on commercial substance?Read the answer and worked solution →Under section 97(4), the fact that taxes are paid under an arrangement is:Read the answer and worked solution →Which benefit may be denied as a consequence under section 98(1)?Read the answer and worked solution →Under section 98(1)(g), the officer may look through an arrangement by disregarding:Read the answer and worked solution →Section 98(2) allows equity to be treated as debt, and debt to be treated as:Read the answer and worked solution →Under section 98(2), a receipt of a capital nature may be treated as a receipt of which nature?Read the answer and worked solution →According to section 100, the GAAR provisions apply:Read the answer and worked solution →Section 101 requires GAAR to be applied in accordance with:Read the answer and worked solution →The Explanation to section 95 allows GAAR to be applied to:Read the answer and worked solution →Under section 102, an arrangement includes an understanding that is:Read the answer and worked solution →A person has substantial interest in a company's business if beneficially holding voting power of at least:Read the answer and worked solution →For a non-company business, substantial interest means at least what profit share?Read the answer and worked solution →

Worked practice questions

In which Chapter of the Income-tax Act, 1961 is the General Anti-Avoidance Rule placed?

  1. Chapter X
  2. Chapter XII
  3. Chapter VI-A
  4. Chapter X-A
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Correct answer: D. Chapter X-A

The GAAR provisions sit in their own Chapter X-A, which follows the transfer pricing Chapter X.

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Which section declares that an arrangement may be treated as an impermissible avoidance arrangement?

  1. Section 95
  2. Section 40A
  3. Section 56
  4. Section 94
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Correct answer: A. Section 95

Section 95 is the applicability provision that lets an arrangement be declared impermissible notwithstanding anything else in the Act.

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Which section defines an impermissible avoidance arrangement?

  1. Section 96
  2. Section 98
  3. Section 99
  4. Section 92
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Correct answer: A. Section 96

Section 96(1) sets out the main purpose test and the four tainted elements that define the term.

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