Q.3 The government is amending the Income Tax Act to do away with retrospective taxation. Examine the advantages of this decision. (10 Marks)

Mentor’s comment-
  • https://www.livemint.com/opinion/online-views/a-pragmatic-laying-to-rest-of-the-retro-tax-ghost-11628235698775.html
  • In the intro, mention the changes made in 2012 that introduced the provision of retrospective taxation in India.
  • In the body mention the implication of the repeal of the retrospective taxation- resolution of cases such as Vodafone and Cairn Energy, restoring the trust of investors, creation of visibility and stability in the taxation policy in the future, honouring the rule of law etc.
  • Conclude by mentioning that the move is simultaneously correct, pragmatic and courageous.
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