GAAR Amendments 2026: Restoring Clarity on Grandfathering Post Tiger Global

Ritu Shaktawat and Vinita Krishnan discuss the Supreme Court’s ruling in the Tiger Global case and its implications for the interpretation of the General Anti-Avoidance Rules (GAAR), particularly the grandfathering benefit for investments made prior to 1 April 2017. GAAR, introduced as an anti-abuse framework, enables tax authorities to disregard arrangements primarily designed to obtain tax benefits and assess them based on substance over form. The Court’s interpretation of the “without prejudice” language in the rules led to uncertainty by indicating that even pre-1 April 2017 investments could be examined under GAAR. In response, the Government amended the GAAR rules on 31 March 2026 to provide greater clarity by removing the ambiguity and stating that income from the transfer of such investments is excluded from GAAR. While capital gains from these investments are now clearly carved out, other income streams, such as dividends and interest, may still be subject to GAAR and treaty claims continue to be evaluated under judicial anti-avoidance principles. The discussion also highlights the continued relevance of maintaining appropriate substance, governance and documentation, as well as the need to review investment structures and exit strategies in light of these developments.