Co-operative bank reorganisation permits loss and depreciation set-off subject to business continuity, asset retention, and anti-abuse conditions.

A successor co-operative bank may carry forward and set off a predecessor bank's accumulated losses and unabsorbed depreciation following amalgamation, subject to statutory conditions. In a demerger, directly attributable amounts transfer to the resulting bank, while non-attributable amounts are apportioned by book value of assets. Eligibility depends on prescribed business continuity, fixed-asset retention, and genuineness conditions. Non-compliance makes previously set-off amounts taxable in the year of breach. Pre- and post-reorganisation periods are treated as separate tax years for loss set-off and depreciation.

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