Two clauses, and they settle how the general anti-avoidance rule chapter operates rather than what it forbids. Clause (a) provides that the Chapter applies in addition to, or in lieu of, any other basis for determination of tax liability. Clause (b) provides that it applies as per such guidelines and subject to such conditions as may be prescribed.
Why it is there
An anti-avoidance chapter is only usable if its relationship with the rest of the Act is fixed. Clause (a) does that by refusing to make the Chapter a last resort — it may be applied alongside an ordinary charging or computation provision or instead of one. Clause (b) subjects that power to guidelines and conditions to be prescribed, so the Chapter is not left to be invoked at large.
Who it applies to
Any assessee whose tax liability may be determined under Chapter XI
An income-tax authority invoking Chapter XI
The Central Government, prescribing guidelines and conditions
What this means in practice
"In addition to, or in lieu of" is the operative phrase: the Chapter does not have to wait until the ordinary provisions have been tried and failed, and applying it does not preclude applying another basis of determination as well. But clause (b) is a real limit — the Chapter applies as per prescribed guidelines and subject to prescribed conditions, so what those guidelines say is part of the rule, and they are prescribed rather than stated in the section. The section itself declares nothing about what an impermissible arrangement is; that is elsewhere in the Chapter.
Where you meet this section
A taxpayer does not encounter this section on its own — it surfaces in the reasoning of an order or a show cause notice that invokes Chapter XI, as the answer to the objection that the ordinary provisions should have been applied first.
The words themselves
in addition to, or in lieu of, any other basis for determination of tax liability
Section 183(a), Income-tax Act, 2025.
as per such guidelines and subject to such conditions, as may be prescribed
Section 183(b), Income-tax Act, 2025.
What people get wrong
Arguing that Chapter XI can be invoked only after the ordinary provisions fail. Clause (a) allows it in addition to, or in lieu of, any other basis for determining tax liability.
Reading clause (b) as decorative. The Chapter applies as per prescribed guidelines and subject to prescribed conditions, which are part of its application.
Looking here for the definition of an impermissible arrangement. This section governs only the Chapter's application.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Press Release, dated 28-6-2012 — Draft guidelines regarding implementation of General Anti Avoidance Rules (GAAR) in terms of section 101 of the Income Tax Act, 19 2012-06-28
Circular No. 24 — 728. Whether production of motion pictures amounts to manufacture or processing of goods within the meaning of section 101(4)(a) 1969-07-23
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 183. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
Ayodhya Rami Reddy Alla v PCITHigh CourtHelps departmenttagged s.100 The AO invoked GAAR even though a specific anti-avoidance section covers my transaction. Can he do that?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.