Change in shareholding restrictions limit carry forward of past losses unless majority voting power is retained or startup conditions met.

Substitution of section 79 restricts the carry forward and set off of losses where a change in shareholding occurs: losses incurred prior to the previous year cannot be carried forward unless persons beneficially holding the majority of voting power on the last day of the previous year are the same as those who held the majority on the last day of the year(s) in which the loss was incurred. Special rules allow carry forward for eligible startups if original shareholders continue to hold voting shares within a limited incorporation period, with exceptions for death, gift to relatives, and certain foreign amalgamation or demerger scenarios.

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