Retro tax law scrapped; Taxation Law (Amendments) Act 2021 gets Presidential assent

The taxation laws (amendment) Act, 2021 received the assent of the President on August 13, the law ministry said in a notification, this scrapping the retrospective taxation clause in income tax law.

The bill which has now become a law amends the Finance Act, 2012, and the Income Tax Act, 1961, nullifying demands raised on transactions prior to May 28, 2012. Tax the indirect transfer of Indian assets will be applied prospectively from this date.

The law provides a framework for resolving international arbitration cases that the government has lost, namely those filed by Vodafone Group Plc and Cairn Energy and 15 others stemming from the retrospective tax law.