New Section 79: Restricts Loss Carry Forward for Non-Public Companies; Includes Exceptions for Startups and Shareholder Changes.

Section 79 of the Income-tax Act has been substituted, effective April 1, 2020, to address the carry forward and set off of losses in certain companies. If a change in shareholding occurs during the previous year in a company not substantially publicly held, losses from prior years cannot be carried forward unless the same shareholders maintain at least 51% voting power. Exceptions include eligible startups, shareholder death, share transfers as gifts, foreign company amalgamations, and changes under approved resolution plans. The section clarifies subsidiary definitions and the role of the Tribunal under the Companies Act, 2013.

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