InvestorQ : What does the government scrapping retrospective tax really mean?
diksha shah made post

What does the government scrapping retrospective tax really mean?

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Dilmini Mercia answered.
4 months ago
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On Thursday, the government announced its decision to scrap the retrospective taxation altogether by introducing a Bill in Parliament. This bill effectively seeks to nullify the provision of retrospective taxation in the Income Tax Act, which was first introduced in 2012 and used by the current government when it came to power in 2014 to put pressure on Cairn and Vodafone. It was a form versus substance debate.

This hopefully brings an end to a long period of regulatory uncertainty for foreign investors and this move appears to be timed along the decision by the Indian government to take over Vodafone in India to work out a rescue package. Government is apparently willing to repay Rs.8,100 crore to Cairn, which will be paid without interest. However, it is still not clear whether the scrapping of retrospective tax will be with retrospective effect or not.

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