NEW DELHI: The finance ministry on Thursday introduced Taxation Laws (Amendment) Bill, 2021 in Lok Sabha to do away with the contentious retrospective tax demand provisions.

The retro tax provision was introduced by the UPA government in Finance Act 2012. The purpose was to impose tax on capital gains made by companies like Cairn Energy Plc and Vodafone Group of UK retrospectively.

As per the amendment, tax raised for the indirect transfer of Indian assets before May 2012 would be “nullified on fulfillment of specified conditions” such as the withdrawal of pending litigation and an undertaking that no damages claims would be filed.

It also proposes to refund the amount paid by companies facing trail in these cases without interest thereon.

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