Tax Laws (Amendment) Bill 2021- End of Retrospective application of the Tax Demand Provision
On 4th August 2021, the Taxation Laws (Amendment) Bill 2021 was introduced in the Lok Sabha which nullifies the retrospective effect of the 2012 amendment. The 2012 amendment retrospectively amended Section 9(1)(i) of the Income Tax Act, 1961 thereby taxing the indirect transfer Indian assets. This amendment was made pursuant to the Vodafone case, through which the transfer of shares to a company incorporated outside India, where the value of such shares was derived substantially, indirectly or directly from the assets located in India. Finally, the Taxation Laws (Amendment) Bill 2021 bill in effect, states that the 2012 amendment would be applicable prospectively and not apply to transactions before the 28 May 2012. The amendment also provides for refund of taxes collected, if any, on the transactions before 28 May 2012 on satisfaction of certain conditions such as not enforcing the arbitration award, not filing any claim before any court or forum, etc.
 The Taxation Laws (Amendment) Bill, 2021, Bill No. 120 of 2021.
 Live Law Networks, ‘Breaking: Centre Introduced Taxation Laws Amendment Bill to Nullify Retrospective Tax Demand Provision Brought By Finance Act 2012’ (Live law, 5 August 2021) < https://www.livelaw.in/top-stories/centre-taxation-laws-amendment-bill-nullify-retrospective-tax-demand-indirect-transfer-finance-act-2012-178948> accessed 6 August 2021.
 Prabhash Ranjan, ‘Burying the ghost of retrospective taxation’ (Hindustan Times, 6 August 2021) < https://www.hindustantimes.com/opinion/burying-the-ghost-of-retrospective-taxation-101628255339663.html> accessed 6 August 2021.
 Times of India, ‘Centre introduces bill to scrap retrospective tax law’ (The Times of India, 5 August 2021) <https://timesofindia.indiatimes.com/business/india-business/centre-introduces-bill-to-scrap-retrospective-tax-law/articleshow/85069433.cms> accessed 6 August 2021.