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India committed to predictability in taxation, says Finance Secretary as Govt seeks to undo retro tax

The proposed Bill lays down the procedure for tax refunds subject to conditions, Finance Secretary TV Somanathan said, adding that it "represents the best way forward" and offers a "fair solution" to companies who have objected to the retro tax law.

August 06, 2021 / 08:13 AM IST
Finance Secretary TV Somanathan.

Finance Secretary TV Somanathan.

British oil major Cairn Energy and other companies who were charged with retrospective taxation would be provided a refund without interest, Finance Secretary TV Somanathan said on August 5, shortly after the Centre tabled a Bill in the Parliament to undo the 2012 retro tax law.

The proposed legislation, Taxation Laws Amendment Bill, would amend the Income Tax Act, 1961 to undo the provision which allowed taxing transactions prior to May 28, 2012.

"We will not enforce the tax demands. Amounts collected will be refunded minus interest," Somanathan said while speaking to CNBC TV 18.

This is an "important time for India to attract investments", the Finance Secretary said, adding that the new law is aimed at clearing apprehensions regarding India's taxation regime.