Skip to main content

Setting off of unabsorbed losses and unabsorbed depreciation during Amalgamation


Setting off of unabsorbed losses and unabsorbed depreciation during Amalgamation

The setting off of unabsorbed losses and unabsorbed depreciation of the amalgamating company by the amalgamated company is allowed only in limited cases as envisaged in Sec 72(A) of Income Tax Act in order to encourage revival of sick units. The setting off, however, is allowed only if the following conditions are fulfilled:

a) the amalgamated company was not a financially viable company immediately before amalgamation
b) the amalgamation was in the public interest
c) such other conditions as the central government may specify by notification in the official gazette to ensure that benefits under this section is available only to facilitate rehabilitation or revival of the business of the amalgamating company

Carry forward of unabsorbed depreciation is allowed only if:
a) during the previous year relevant to the assessment year, the business of the amalgamating company was carried out by the amalgamated company without any modification or reorganisation as was permitted by central government; and
b) the amalgamated company furnishes along with the return on income tax a certificate from the specified authority to the effect that adequate steps have been taken into account for the rehabilitation of sick unit.

Comments

Popular posts from this blog

Vikash Goel - Introduction

Hello People, Welcome to my Blog Please pardon me if u find this blog a bit unconventional, unusual and out of place. To be honest, m not a blogger and this is my Debut as far as Blogging is concerned. I am a simple, average guy from Kolkata, India. I am a CA, MS Finance, CFA (ICFAI, India), Diploma in Business Management, Bachelor of Commerce. Meanwhile for a quick look about me, visit the link below, (its become a little outdated as of now but still enough to give an idea about me) http://www.freewebs.com/vikash_goel/ www.vikashgoel.com Catch ya soon

Angel Tax on start-ups may be amended soon

The Angel Tax imposed on start-ups has been the talk of the town lately. Various start-up founders have received demand notices from the tax authorities which plans to tax the capital receipts in the form of Income when the tax authorities believe that the amount is in excess of the value of the company. What is Angel Tax? In 2012, the then Finance Minister Pranab Mukherjee introduced a tax on unlisted companies which aimed at raising funds from investors (the 'angel investors") who invested in these companies with the objective of gaining significant returns. Since many companies used this route to launder money and raise funds at excessive valuations, the tax was imposed to arrest such money laundering. Angel Tax is a tax payable by the unlisted companies who raise funds via issue of shares where the share price is believed to be in excess of the fair market value of the shares sold. What is a Startup? An entity shall be considered as a Startup: (i). Upto a period o...

Economic Survey 2013 Highlights

Chief Economic Advisor Raghuram Rajan tabled his first ever Economic Survey. Key features of the Survey are: GDP growth for 2012-13 is expected at 5% GDP growth for 2013-14 is expected at 6.1% to 6.7% The Average WPI Inflation has come down from 8.9% in 2011-12 to 7.6% in 2012-13 The Average CPI Inflation has increased from 8.4% in 2011-12 to 10.0% in 2012-13 Gross Fiscal Deficit has come down from 5.7% of GDP to 5.1% of GDP Revenue Deficit has come down from 4.3% of GDP to 3.5% of GDP The trade deficit increased to US$ 189.8 billion (10.2 per cent of GDP) in 2011-12 as compared to US$ 127.3 billion (7.4 per cent of GDP) during 2010-11. Current account deficit seen at 4.6% for 2013-14 Overall global economic environment remains fragile Gold imports is key contributor to inflation, imports need to be curbed LPG and Diesel prices need to be increased in line with global rates, oil subsidy is a key risk