April 16, 2024
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Government Plans to Modify the Income Tax Act Making Retrospective Tax Demands Null

Following the failures of Vodafone and Cairn Energy, the Union government said on Thursday that it would change the Income Tax Act to eliminate retrospective taxation.

The Taxation Laws (Amendment) Bill, 2021, was submitted in the Lok Sabha by Finance Minister Nirmala Sitharaman, with the goal of removing tax claims made on indirect transfers of Indian assets prior to May 28, 2012.

At least two large firms are affected by this bill: Cairn Energy Plc and the Vodafone Group of the United Kingdom. Both companies had won international arbitrations challenging the imposition of retroactive taxes on them.

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