In a rare and welcome 1 April move, the Central Board of Direct Taxes (CBDT) has restored clarity on one of the most contentious aspects of India’s anti-avoidance regime.
By way of a notification dated 31 March 2026, the CBDT has amended Rule 128 of the Income-tax Rules, 2026 to unequivocally confirm that income from the transfer of investments made before 1 April 2017 remains outside the ambit of GAAR, even if the exit takes place subsequently.
This clarification, though concise, carries significant implications. It realigns the rule text with what most taxpayers and advisors had always understood to be the original intent behind GAAR grandfathering.
What was the issue? The Tiger Global context.
