Section 182 - Treatment of connected person and accommodating party
The tax-benefit computation is not confined to entity-by-entity legal form. Connected parties can be aggregated, and a party inserted only to facilitate the tax result can be ignored or merged with another party.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 182 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
The tax-benefit computation is not confined to entity-by-entity legal form. Connected parties can be aggregated, and a party inserted only to facilitate the tax result can be ignored or merged with another party.
Who should use this section
Connected persons and accommodating parties whose legal separation can be disregarded or aggregated for GAAR consequence purposes.
Old-law bridge
section 99
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
No section-specific Finance Act, 2026 textual substitution is separately flagged for section 182; the consolidated post-Finance-Act-2026 text remains the controlling version and must be used instead of pre-1 April 2026 extracts.
Professional alert
Prepare a complete connected-party map. Identify each party’s independent role, risk and reward. Aggregate tax benefit across all relevant parties for Rule 128.
Connected Income-tax Rules, 2026 and Forms
| Rule | Current control | Form |
|---|---|---|
| Rule 127-132 | GAAR aggregation, consequence and procedure controls | 62, 63, 64 where applicable |
Worked application
A conduit earns a small fee while passing nearly all cash and risk to a connected enterprise. The conduit can be disregarded when measuring the arrangement’s tax benefit.
Evidence / compliance checklist
- Prepare a complete connected-party map (section 182 evidence control 1).
- Identify each party’s independent role, risk and reward (section 182 evidence control 2).
- Aggregate tax benefit across all relevant parties for Rule 128 (section 182 evidence control 3).
- Archive the prescribed Rule/Form output for section 182 together with the acknowledgement, filing date and underlying computation.
Common mistake
A common section 182 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Treatment of connected person and accommodating party”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. Prepare a complete connected-party map. Identify each party’s independent role, risk and reward. Aggregate tax benefit across all relevant parties for Rule 128.
Recommended approach
For section 182, start with the legal trigger in “Treatment of connected person and accommodating party”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: The tax-benefit computation is not confined to entity-by-entity legal form. Connected parties can be aggregated, and a party inserted only to facilitate the tax result can be ignored or merged with another party.
Thresholds, periods and timing checkpoints
- Section 182 contains no standalone numeric checkpoint extracted for the register; apply its operative conditions from the current statutory text.
Related provisions and interaction map
Section 182 must be read within sections 178-184 GAAR, Rules 127-132, and the section 274 approval procedure with Forms 62-64 only where the prescribed procedural step applies.
Current statutory text
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 182?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.