Representative image
Representative image

CBDT issues clarification on carrying forward losses in case of change in shareholding due to strategic disinvestment

ANI | Updated: Sep 10, 2021 23:57 IST


New Delhi [India], September 10 (ANI): The Central Board of Direct Taxes (CBDT) on Friday issued clarification regarding carrying forward of losses in case of change in shareholding due to strategic disinvestment.
Section 79 of the Income-tax Act, 1961 will not apply in a case involving a change in shareholding due to such strategic disinvestment.

"Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 to inter alia provide that in case of an amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies. then subject to the conditions laid therein, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss. or as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected," said CBDT statement.
CBDT said it has been decided that Section 79 of the Income-tax Act, 1961 shall not apply to an erstwhile public sector company that has become so as a result of strategic disinvestment in order to facilitate the strategic disinvestment.
"Accordingly, the loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company," it added. (ANI)

Loading...
iocl
iocl