The government has notified the Taxation Laws (Amendment) Act, 2021, after it received the assent of the president on August 13, 2021. The move would lead to scrapping of the retrospective taxation clause in income tax law.
The law amends the Finance Act, 2012, and the Income Tax Act, 1961, nullifying demands raised on transactions prior to May 28, 2012. With this, tax the indirect transfer of Indian assets will be applied prospectively from this date.
The law provides a framework to resolve the international arbitration cases lost by the government, namely those filed by Vodafone Group Plc and Cairn Energy and 15 others stemming from the retrospective tax law.
