New Delhi: The union Government on Thursday introduced a bill in the Lok Sabha that seeks to amend the Income Tax act to end the controversial retrospective tax demand. The move came after back-to-back tax disputes with Cairn energy and Vodafone Group. Both the companies have won international arbitration against levy of retrospective tax on them.
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.
The Bill also proposed to refund the amount paid in these cases without any interest thereon. “Bill proposes to amend I-T Act, so as to provide that no tax demand shall be raised in future on basis of said retrospective amendment for any indirect transfer of Indian assets if transaction before 28th May, 2012,” said government.
The Bill proposes to amend the Income Tax Act, 1961 so as to provide that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012.
The move is being seen as a damage control by the Indian government as the controversial retrospective tax law has said to be dented India’s image as a favourable investment destination.