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India Publishes Notification Containing New Rules for Indirect Transfers — Orbitax Tax News & Alerts

India's Central Board of Direct Taxes has announced the publication of Notification No. 118/2021, which contains the Income Tax (31st Amendment) Rules 2021. The amendment rules provide for the introduction of a new Rule 11UE in the Income Tax Rules 1962 for the application of the amendments introduced by the Taxation Laws (Amendment) Act 2021. The Act made important amendments to the Income Tax Act 1961 and the Finance Act 2012 in regard to the taxation of indirect transfers of Indian assets, including the nullification of the retroactive taxation of indirect transfers made before 28 May 2012. This includes that any tax demands that have been issued in relation to indirect transfers before 28 May 2012 are to be treated as if they were never issued if specified conditions are met and that amounts of tax paid on indirect transfers before 28 May 2012 are to be refunded, without interest. One of the key conditions is that a taxpayer withdraws or submits an undertaking to withdraw any appeal, petition, etc. in relation to an assessment, which is detailed by the new Rule 11UE. The amendment rules also introduce a new Rule 11UF, which provides the form and manner of furnishing the undertaking for withdrawal of pending litigation, claiming no cost, damages, etc.