What the budget meant for your business
18 April 2012
Hitesh Sharma of Ernst & Young runs through the tax changes announced in March’s budget and offers advice to taxpayers on how to manage the overwhelming amount of retrospective law changes that have been made.
The Indian Union Budget for 2012-13 was presented in the backdrop of
the Indian economy facing a slowdown in view of a struggling global
economy and significant dip in tax collections.
In his speech, the finance minister (FM) quoted Shakespeare: "I must
be cruel only to be kind", and with these words set the tone for his tax
proposals. The proposals contain 245 amendments, of which 55% have
retroactive applicability and several of them override judicial
precedents with very few favouring taxpayers. After many years, India
has seen a budget with a set of bold and fundamental tax proposals
targeted towards plugging tax avoidance and unaccounted money; but
equally these provisions present an unfair situation for industry and
cast a shadow on expectation of industry to have a more certain tax
environment in India.
Indirect asset transfers
The Vodafone controversy highlights the aggressive position that the
tax authorities are adopting in...
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