Clause 118 - Carry forward and set off of losses and unabsorbed depreciation in business reorganisation of co-operative banks.

Carry forward and set off of losses allows successor co operative banks to utilise predecessor tax attributes after reorganisation.

On amalgamation, predecessor co operative bank accumulated business loss and unabsorbed depreciation may be set off by the successor co operative bank for that tax year as if the reorganisation had not occurred; on demerger, amounts directly attributable to the transferred undertaking carry forward to the resulting co operative bank, otherwise they are apportioned between demerged and resulting banks in the ratio of distributed assets. Carry forward is limited to eight succeeding tax years and is subject to continuity, fixed asset holding and business continuation tests and other prescribed conditions; non compliance renders the set off taxable as income.