Government to Amend Income Tax Act with Retrospective Effect

After Vodafone and Cairn Energy setbacks, Union government on Thursday moved to end retrospective tax by amending Income Tax Act.

Finance Minister Nirmala Sitharaman introduced The Taxation Laws (Amendment) Bill, 2021 in the Lok Sabha, which seeks to withdraw tax demands made on indirect transfer of Indian assets prior to May 28, 2012.

Government also proposed to refund the amount paid in these cases without any interest thereon. Tax raised for the indirect transfer of Indian assets before May 2012 would be “nullified on fulfillment of specified conditions” such as the withdrawal of pending litigation and an undertaking that no damages claims would be filed, a government statement said.

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