Retrospectivity Of Tax Law In India

Deepti Sharma, MIT WPU, Pune, Maharashtra

“An ideal taxation system must be based on the principles of equity, certainty, convenience, and efficiency.” – Adam Smith in Wealth of Nations.

ABSTRACT

Although taxes may seem as a necessary financial obligation to support government services, their concept is grounded in the social contract theory of governance. In addition to serving as a tool for wealth redistribution between the rich and the poor, taxes are payments made by the individual in exchange for the economic benefits that the government and society provide. Therefore, a just and equitable taxation system is necessary for a democratic system to operate properly. Retrospective amendments to tax laws impose obligations that existed in the past even though the statute may not have existed at all. This research will explore these retrospective legislations and amendments passed by the government in India. While retrospective taxation has a scope of research, the main aim of this research is to understand these retrospective tax laws, their validity and effect on economy. Firstly, the research will deal with the understanding of the concept of retrospective taxation and then the legislations and amendments passed by the government of India will be thoroughly discussed. The research will be concluded with the validity of these legislations and amendments with few suggestions.

Keywords: Tax law, Retrospectivity, Validity, Legislations, Economy