Waive interest, penalty in cases of retrospective tax changes: Shome

In a recommendation that could provide relief to firms like Vodafone, a government-appointed committee on Tuesday favoured companies facing tax liability following retrospective amendment to the Income Tax Act should be exempted from payment of interest.

'In all cases where demand of tax is raised on account of retrospective amendment relating to indirect transfer...no interest...should be charged in respect of that demand so that there is no undue hardship caused to the tax payer,' said Parthasarathi Shome panel's draft report on retrospective amendment relating to indirect transfer. Moreover, in such cases no penalty should be levied in respect of the income brought to tax on application of retrospective amendment.