Insolvency and Bankruptcy Board of India (IBBI) issued Circular No. IBBI/CIRP/83/2025 on March 17, 2025, mandating detailed disclosures of carry forward losses in the Information Memorandum (IM) prepared under the Corporate Insolvency Resolution Process (CIRP). This directive stems from the recent amendment to Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Insolvency Professionals (IPs) must now include a dedicated section in the IM explicitly detailing:
1. The quantum of carry forward losses under the Income Tax Act, 1961.
2. A breakdown of losses by specific categories.
3. Applicable time limits for utilizing these losses.
4. A statement specifying if no carry forward losses are available.
This enhanced framework aims to provide potential resolution applicants with a comprehensive understanding of the corporate debtor’s financial position, thereby facilitating informed and viable resolution plans. This circular is issued under the powers granted by Section 196 of the Insolvency and Bankruptcy Code, 2016, and is applicable to all registered insolvency professionals, agencies, and entities. The move underscores IBBI’s focus on transparency and detailed financial disclosures in insolvency proceedings.
Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001
Circular No. No. IBBI/CIRP/83/2025 Dated:17th March, 2025
To:
All Registered Insolvency Professionals
All Recognised Insolvency Professional Entities
All Registered Insolvency Professional Agencies
(By mail to registered email addresses and on the website of the IBBI)
Dear Madam/Sir,
Subject: Disclosure of information relating to carry forward of losses in Information Memorandum (IM)
The Insolvency and Bankruptcy Board of India (IBBI) had amended Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (‘CIRP Regulations’) to mandate the disclosure of carry forward of losses as per the Income Tax Act, 1961, in the Information Memorandum (IM). Further, Insolvency Professionals (IPs) were also advised to ensure comprehensive capture of details related to carry forward losses and the disclosure thereof.
2. Upon review of recent Information Memorandum(s), the Board has observed that disclosure of carry forward of losses by Insolvency Professionals need to be more robust. Accordingly, it is hereby directed that all Insolvency Professionals shall include a dedicated section in the IM explicitly detailing the carry forward of losses under the Income Tax Act, 1961. This section shall prominently highlight, but is not limited to, the following aspects:
a) The quantum of carry forward losses available to the corporate debtor ;
b) A breakdown of these losses under specific heads as per the Income Tax Act,1961;
c) The applicable time limits for utilizing these losses; and
d) If there are no carry forward of losses available to the Corporate debtor , the Information Memorandum should explicitly specify the fact.
3. This enhanced disclosure framework is intended to provide potential resolution applicants with a more comprehensive understanding of the corporate debtor’s financial position, enabling them to develop more informed and viable resolution plans while considering the benefits of carry forward losses.
4. This is issued in the exercise of the powers conferred under section 196 of the Insolvency and Bankruptcy Code, 2016.
Yours faithfully
-Sd/-
Jithesh John
(Executive Director)
