The Income Tax Department has said that the Taxation Laws Amendment Bill, which seeks to nullify retrospective tax demands raised on companies, will instill investor confidence and provide impetus to India's goal of becoming a $5 trillion economy. The bill, which was cleared by the Lok Sabha on August 6, was passed by the Rajya Sabha on August 9. The bill, as passed by the Upper House, will be cleared by the Lok Sabha for it to become an Act.
I-T department said it would spur companies which are at the cusp of deciding their investments to invest in India. It will avoid unnecessary litigation and save time and costs of the government, besides boosting the policy of predictable tax regime. It will instill foreign as well as domestic investors with confidence in the Indian economy.
It also said the bill proposes to scrap the tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India. The 2012 legislation was used to levy a cumulative of Rs 1.10 lakh crore of tax on 17 entities, including UK telecom giant Vodafone, but substantial punitive action was taken only in the case of Cairn.
