Taxation Laws (Amendment) Bill passed, nullifies retrospective tax: All you need to know

The Rajya Sabha on Monday passed the Taxation Laws (Amendment) Bill, 2021, which plans to do away with the retrospective tax provision and end all retrospective taxes imposed on indirect transfer of Indian assets made before May 28, 2012. This means that the tax demands made on companies like Cairn Energy and Vodafone will now be withdrawn. The tax demand that was made using the Finance Act, 2012, will also be withdrawn.

Union finance minister Nirmala Sitharaman while replying to the debate on the bill said that India’s sovereign right to tax will remain ‘intact’ and nothing is being ‘diluted’. She also pointed out that former Union finance minister P Chidambaram earlier welcomed the same bill when it was passed in the Lok Sabha.