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Changes in retro tax amendments unlikely in Budget

"Time is too short for undoing the amendments made to IT Act in this Budget. It would require widespread consultation with stakeholders. All pros and cons have to be analysed," official sources said.

twitter-logo PTI   New Delhi     Last Updated: May 28, 2014  | 19:41 IST
Changes in retro tax amendments unlikely in Budget

The new government in the forthcoming Budget is unlikely to take a view on the retrospective amendment to Income Tax laws as it is keen to weigh pros and cons before taking any decision on this matter.

"Time is too short for undoing the amendments made to IT Act in this Budget. It would require widespread consultation with stakeholders. All pros and cons have to be analysed," official sources said.

The last government could not take a view on reversing the retrospective tax amendment Act, sources said.

A decision needs to be taken on going ahead with changing amendments before pending litigations, including that involving Vodafone, are resolved, sources said adding that the pending litigations would have huge implication on revenue.

Amendment to Income Tax Act with retrospective effect made by the UPA government in 2012 to protect revenue had evoked sharp reactions from domestic as well as global investors.

Following the amendment to the Tax laws, the authorities issued a letter to Vodafone International Holdings BV stating that the company was required to pay tax demand of about Rs 11,217 crore along with interest.

Besides, an Income-Tax Department's order in January this year held that Edinburgh-based Cairn Plc made capital gains of Rs 24,503.50 crore when it transferred its entire India business from subsidiaries incorporated in Jersey, a tax haven, to the newly incorporated Cairn India in 2006.

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