– August 5, 2021 7:40 p.m.
The government tabled the Law Amending Tax Laws in Lok Sabha on Thursday to withdraw the controversial retroactive tax introduced by the 2012 Finance Law.
“The bill proposes to amend the Income Tax Act of 1961 so that, based on the aforementioned retrospective amendment, no tax claims will be made on indirect transfers of Indian assets if the transaction was made before May 28, 2012,” said Treasury Secretary Nirmala Sitharaman in a written declaration together with the draft law.
It is also proposed to provide that the request for indirect transfers of Indian assets made before May 28, 2012 if certain conditions are met, such as:
“It is also suggested that the amount paid in these cases be returned without interest,” Sitharaman said.
The bill will amend the Income-Tax Act 1961 so that, based on the aforementioned retrospective amendment, no future tax claims will be made on indirect transfers of Indian assets if the transaction was made before May 28, 2012 (i.e. the date when on which the 2012 financial draft received the approval of the President). It is also proposed to provide that the claim made before May 28, 2012 for an indirect transfer of Indian assets if certain conditions are met, such as a claim for costs, damages, interest, etc. does not exist. It is also suggested that the amount paid be refunded interest-free in these cases. The draft law also provides for the 2012 Finance Act to be amended so that the confirmation of application, etc. in accordance with Section 119 of the 2012 Finance Act, if certain conditions are met, such as withdrawal of a pending legal dispute and an assurance that no claim for costs, damages, interest, etc. is applicable should be made.
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