Taxation Laws (Amendment) Act 2021

Central Government notified the Taxation Law Amendments Act, 2021 to repeal the contentious ‘Retrospective Tax’ brought by Finance Act 2012.

Aim: It aims to bring tax certainty and ensure that once specified conditions are fulfilled, the pending Income-tax proceedings shall be withdrawn; demand, if any, raised shall be nullified; and amount, if any, collected shall be refunded to the taxpayer without any interest.

• With this amendment, the government is aiming to settle retrospective tax disputes with Cairn Energy and the Vodafone Group.

Impact: It will allow cordial settlement of various tax disputes that arose from retrospective use of an anti-evasion provision introduced in 2012.

• It will increase the confidence of foreign investors in Indian economy.