Can amalgamated company carry forward losses?

Can amalgamated company carry forward losses?

Business loss of an amalgamating company shall be allowed to be carried forward and set off in the hands of the amalgamated company for fresh eight years if certain conditions mentioned in section 72A are satisfied. It can be carried forward indefinitely and set off in the hands of amalgamated company.

What are the provisions to set off and carry forward of unabsorbed depreciation?

Clause 3 makes it clear that the unabsorbed depreciation shall be carried forward and set off against the profits and gains of business or profession; if it cannot be wholly so set off, it shall be set off against any other head for that AY; if it still cannot be set off, the balance unabsorbed depreciation shall be …

Which method of description is approved by Income-Tax Act?

The concept of depreciation is used for the purpose of writing off the cost of an asset over its useful life. Depreciation is a mandatory deduction in the profit and loss statements of an entity and the Act allows deduction either in Straight-Line method or Written Down Value (WDV) method.

What are the Tax incentives relating to amalgamation?

Under section 47(vi) of the Income-tax Act, capital gain arising from the transfer of assets by the amalgamating companies to the Indian Amalgamated Company is exempt from tax as such transfer will not be regarded as a transfer for the purpose of Capital Gain.

Which loss is not carry forward?

The following losses cannot be carried forward unless the return of income (for the year in which the loss is incurred) is submitted within the due date [of submission of return as given in section 139(1)]. loss (not being unabsorbed depreciation etc., from the activity of owning and maintaining race horses.

What is section 73 in Income Tax Act?

73. (1) Any loss, computed in respect of a speculation business carried on40 by the assessee, shall not be set off except against profits and gains, if any, of another speculation business.

What is unabsorbed depreciation for Mat?

Unabsorbed depreciation is that amount of unutilised depreciation which the assessee will not be able to claim as an expense in his income tax returns due to lack of sufficient profit in the profit & loss account.

How is depreciation loss calculated?

The original purchase price of the asset, minus all accumulated depreciation and any accumulated impairment charges, is the carrying amount of the asset. Subtract this carrying amount from the sale price of the asset. If the remainder is positive, it is a gain. If the remainder is negative, it is a loss.

What does Section 72A of the Income Tax Act 1961 do?

Chapter VI (Sections 66-80) of Income Tax Act, 1961 deals with provisions related Aggregation of income and set off or carry forward of loss. Section 72A of Income Tax Act 1961-2017 provides for Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.

Are there any amendments to Section 72A of the Act?

Amendments of Section 72A The provisions of S.72A were subjected to a number of amendments, which may be summarized as follows:- This Act inserted a new sub-section (3) in S.72A, enabling the companies concerned to obtain an advanced ruling from the specified authority.

What was the original purpose of s.72a?

Originally, the heading of S.72A was, “Provisions relating to carry-forward and set-off of accumulated loss and unabsorbed depreciation allowance in certain cases of amalgamation.”

What is Clause 38 of the Income Tax Act?

The same are reproduced as follows:- Clause 38 seeks to substitute S.72A of the Income-Tax Act relating to carry-forward and set-off of accumulated loss and unabsorbed depreciation in certain cases of amalgamation.