Retrospective tax settlement: Companies will have to indemnify the Indian government

Companies looking to settle their retrospective tax disputes would have to commit to indemnify the Indian government against any future claims in relation to their tax disputes.

The indemnity and commitment to not seek any damage from the Indian government or its affiliates will have to be furnished by the company as also any other interested party, the government said in the final rules notified late Friday. Companies will have to file a declaration with the income tax authorities along with a board resolution or legal authorisation besides an indemnity bond, the rules said.

The Central Board of Direct Taxes notified the final rules for settlement of retrospective cases after incorporating certain changes following comments from stakeholders on draft rules, issued on August 28.