Income Tax Form 29: Certificate on Prescribed Production Level by Amalgamated Company

Form 29 is a mandatory certificate under Rule 60 of the Income-tax Rules, 2026, required to be filed by an amalgamated company to claim carry forward and set-off of accumulated losses and unabsorbed depreciation under section 116(4)(b)(iii) of the Income-tax Act, 2025. The form certifies that the company has achieved at least 50% of the installed production capacity of the acquired undertaking within four years of amalgamation and continues to maintain it for five years. It must be filed annually along with the return of income for the relevant years and verified by an accountant. Failure to furnish or maintain prescribed production levels may lead to withdrawal of tax benefits and recomputation of earlier allowances. The form ensures compliance with statutory conditions, supports verification by tax authorities, and reduces disputes regarding amalgamation-related tax benefits, thereby promoting transparency and accountability in restructuring transactions.

FAQs on Income Tax Form 29: Certificate from principal officer of amalgamated company and duly verified by an accountant regarding achievement of the prescribed level of production and continuance of such level of production in subsequent years

Certificate regarding achievement and maintenance of prescribed level of production in case of amalgamation

Q1. What is Form 29?

Ans: Form 29 is a certificate prescribed under Rule 60 of the Income Tax Rules, 2026, to be furnished by the amalgamated company for certifying that it has achieved and continued to maintain the prescribed level of production of the industrial undertaking(s) acquired through amalgamation. The form is required for availing the benefit of carry forward and set-off of accumulated loss and unabsorbed depreciation under Section 116(4)(b)(iii) of the Income Tax Act, 2025.

Q2. Who is required to file Form 29?

Ans: Form 29 is required to be filed by every amalgamated company which:

– Has acquired one or more industrial undertakings by way of amalgamation, and

– Intends to claim the benefit of carry forward or set-off of accumulated losses and unabsorbed depreciation of the amalgamating company under Section 116(4)(b)(iii) of the Income Tax Act, 2025.

Q3. Is Form 29 mandatory?

Ans: Yes. Furnishing Form 29 is mandatory for an amalgamated company seeking tax benefits under Section 116(4)(b)(iii) of the Income Tax Act, 2025. Non-furnishing or incorrect furnishing of Form 29 may result in denial of the benefit of carry forward or set-off.

Q4. What is the prescribed level of production for the purpose of Form 29?

Ans: As per Rule 60 of the Income Tax Rules, 2026:

– The amalgamated company must achieve at least 50% of the installed capacity of production of the amalgamated undertaking

– Before the end of four years from the date of amalgamation, and continue to maintain such level up to five years from the date of amalgamation.

Q5. What is meant by “installed capacity”?

Ans: For the purposes of Rule 60 of the Income Tax Rules, 2026 and Form 29, installed capacity means the capacity of production existing on the date of amalgamation of the undertaking.

Q6. When should Form 29 be filed?

Ans: Form 29 must be furnished:

– Along with the return of income for the tax year in which the prescribed level of production is first achieved, and

– Along with the returns for each subsequent tax year falling within five years from the date of amalgamation.

Q7. How many times is Form 29 required to be filed?

Ans: Form 29 is year-specific. It is required to be filed:

– For the year in which 50% production is achieved, and

– For every subsequent year up to five years from the date of amalgamation, as long as the condition of maintenance of production applies.

Q8. Can Form 29 cover more than one amalgamating company?

Ans: Yes. The new Form 29 has been redesigned to allow reporting details of multiple amalgamating companies.

Q9. Who is required to sign and verify Form 29?

Ans: The form must be signed by the principal officer of the amalgamated company. It must be verified by an accountant, as defined under section 515(3)(b) of the Income Tax Act, 2025.

Q10. What documents are required for furnishing Form 29?

Ans: The following documents/records are generally required:

– Books of account of the amalgamated company

– Production and capacity utilization records

– Details of installed capacity as on the date of amalgamation

– Records evidencing achievement and maintenance of prescribed production levels

– Auditor’s working papers supporting the certification

Q11. Can Form 29 be filed offline?

Ans: No. The Form 29 is to be filed electronically through the Income-tax portal, with system- generated validations, pre-filled PAN data, and digital verification.

Q12. What happens if the prescribed level of production is not maintained?

Ans: If the amalgamated company fails to maintain the prescribed level of production: The benefit of carry forward and set-off under Section 116(4)(b)(iii) of the Income Tax Act, 2025 may be withdrawn, and past allowances may become liable to re-computation as per law.

Q13. Is there any relaxation available if production targets cannot be achieved?

Ans: Yes. The Central Government may relax:

– The level of production,

– The period for achieving the production, or

– Both,

in suitable cases, having regard to genuine efforts made by the amalgamated company and circumstances beyond its control.

Q14. Why is Form 29 important?

Ans: Form 29 is critical because it:

– Establishes compliance with Rule 60 of the Income Tax Rules, 2026 conditions

– Enables continuation of tax benefits under Section 116(4)(b)(iii) of the Income Tax Act, 2025.

– Provides statutory assurance to the Assessing Officer

– Reduces litigation and future disputes relating to amalgamation benefits

Q15. Where is Form 29 referred to in the Income-tax Rules?

Ans: Form 29 is referred to in Rule 60 of the Income Tax Rules, 2026, which mandates furnishing of the certificate along with the return of income.

Form 29 – Certificate regarding achievement and maintenance of prescribed level of production in case of amalgamation

Guidance Note on Income Tax Form 29: Certificate from principal officer of amalgamated company and duly verified by an accountant regarding achievement of the prescribed level of production and continuance of such level of production in subsequent years

 Purpose:

Form 29 is prescribed under Rule 60 of the Income Tax Rules, 2026 and is required to be filed by the amalgamated company to certify the achievement and maintenance of the prescribed level of production of the undertaking(s) received through amalgamation.

This form serves as an evidence of compliance with the conditions laid down in Section 116(4)(b)(iii) of the Income Tax Act, 2025 for allowing carry forward and set-off of accumulated loss and unabsorbed depreciation of the amalgamating company.

The form must be certified by the principal officer of the amalgamated company and verified by an accountant (as defined in section 515(3)(b) of the Income Tax Act, 2025).

Who Should File:

Every amalgamated company that has acquired an industrial undertaking of one or more amalgamating companies by way of amalgamation, and seeks to claim the benefit of set-off or carry-forward of accumulated loss or unabsorbed depreciation of the amalgamating entity, must file Form 29.

When and How to File:

1. The form shall be furnished to the Assessing Officer along with the return of income for:

• • the tax year during which the amalgamated company achieves at least 50% of the installed capacity of production of the amalgamated undertaking, and
  • each of the subsequent tax years falling within five years from the date of amalgamation.

2. Filing is required for every amalgamated undertaking covered under Rule 60 of the Income Tax Rules, 2026.

3. The form shall be digitally signed by the principal officer of the amalgamated company and electronically verified by the accountant through the Income-tax portal.

Legal Framework (Rule 60 of the Income Tax Rules, 2026 Overview):

Under Rule 60 of the Income Tax Rules, 2026, the following key conditions apply:

• The amalgamated company must achieve at least 50% of installed capacity of the undertaking acquired by way of amalgamation within four years from the date of amalgamation.
• The said minimum level must be maintained continuously for five years from the date of amalgamation.
• The Central Government may relax the conditions in genuine cases upon application by the amalgamated company.
• A certificate in Form 29, verified by an accountant, must be furnished with the return of income for the relevant years.

Verification:

The accountant is required to:

1. Examine books of account and supporting records showing production data.

2. Verify that prescribed production levels were achieved and maintained.

3. Declare correctness of particulars under his signature and details.

Outcome and Usage:

• For Amalgamated Company:

Filing Form 29 ensures continued eligibility for tax benefits under Section 116(4)(b)(iii) of the Income Tax Act, 2025. Non-furnishing or inaccurate certification can lead to disallowance of set off and carry-forward benefits.

• For Assessing Officer:

Enables verification of compliance with prescribed production thresholds and maintenance conditions under Rule 60 of the Income Tax Rules, 2026.