TaxTMI 
TaxTMI 
Treatment of accumulated losses and unabsorbed depreciation in amalgamation or demerger, etc.
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....hase agreement entered into under strategic disinvestment restricted immediate amalgamation of the said public sector company and the amalgamation is carried out within five years from the end of the tax year in which the restriction on amalgamation in the share purchase agreement ends, then, irrespective of anything in any other provision of this Act, the accumulated loss and unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, allowance for unabsorbed depreciation of the amalgamated company for the tax year in which the amalgamation was effected, and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly. (2) The accumulated loss....
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....n (1), the accumulated loss shall not be set off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless,- (a) the amalgamating company- (i) has been engaged in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for three or more years; (ii) has held continuously as on the date of the amalgamation, at least three-fourths of the book value of fixed assets held by it two years preceding the date of amalgamation; (b) the amalgamated company- (i) holds continuously for a minimum five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amal....
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....uch conditions to ensure that the demerger is for genuine business purposes. (8) If there has been a business reorganisation where, a firm is succeeded by a company fulfilling the conditions laid down in section 70(1)(zd) or a proprietary concern is succeeded by a company fulfilling the conditions laid down in section 70(1)(zf), then, irrespective of anything contained in this Act, the accumulated loss and the unabsorbed depreciation of the predecessor firm or the proprietary concern, shall be deemed to be the loss or allowance for depreciation of the successor company for the tax year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation ....
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....r the 1st April, 2025, any loss forming part of the accumulated loss of the predecessor entity, being- (i) the amalgamating company; or (ii) the firm or proprietary concern; or (iii) the private company or unlisted public company, as the case may be, which is deemed to be the loss of the successor entity, being- (a) the amalgamated company; or (b) the successor company; or (c) the successor limited liability partnership, as the case may be, shall be carried forward for not more than eight tax years immediately succeeding the tax year for which such loss was first computed for the original predecessor entity. (13) In this section,- (a) "accumulated loss" means so much of the loss of the predecessor firm or the proprietary co....