Banking and Insurance Amalgamation: Section 72AA Allows Carrying Forward Losses and Depreciation with Eight-Year Limit from 2025

Section 72AA allows accumulated losses and unabsorbed depreciation to be carried forward and set off in specific cases of amalgamation involving banking companies, banking institutions, corresponding new banks, and government companies engaged in general insurance business. The provision applies when amalgamation occurs under schemes sanctioned by the Central Government under various banking and insurance regulations. From April 1, 2025, losses carried forward by successor entities will be limited to eight assessment years. The section defines key terms including accumulated loss, banking company, strategic disinvestment, and unabsorbed depreciation, detailing how these losses can be treated as those of the amalgamated entity.