CBDT issues clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment vide press release and notification No. Notification No. 105/2021-Income Tax Dated 10.09.2021.
Ministry of Finance
CBDT issues clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment
Posted On: 10 SEP 2021
Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 (the Act) to inter alia provide that in case of an amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies, then, subject to the conditions laid therein, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss, or as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected.
In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment. Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company.
The term “erstwhile public sector company” and “strategic disinvestment” shall have the meaning in Explanation to clause (d) of sub-section (1) of Section 72A of the Income-tax Act, 1961.
Necessary legislative amendments for the above decision shall be proposed in due course of time.
(Release ID: 1753960)
************
CBDT notifies Taxability of Gift is not applicable w.r.t Equity Shares of PSU, received from Government under Strategic Disinvestment
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi
Notification No. 105/2021-Income Tax | Dated: 10th September, 2021
G.S.R. 623(E).—In exercise of the powers conferred by clause (XI) of the proviso to clause (x) of sub-section (2) of section 56 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: ‒
1. Short title and commencement:-(1) These rules may be called the Income-tax (28th Amendment) Rules, 2021.
(2) They shall come into force from the 1st day of April, 2022 and shall be applicable for the assessment year 2022-23 and subsequent assessment years.
2. In the Income-tax Rules, 1962, in rule 11UAC, after clause (3), the following clause shall be inserted, namely: —
“(4) any movable property, being equity shares, of the public sector company, received by a person from the Central Government or any State Government under strategic disinvestment.
Explanation–For the purpose of this clause, „strategic disinvestment‟ shall have the same meaning as assigned to it in clause (iii) of Explanation to clause (d) of sub-section (1) of section 72A.”.
[Notification No. 105/2021/F. No. 370149/158/2021-TPL]
ANKIT JAIN, Under Secy. (Tax Policy and Legislation)
Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969(E), dated the 26th March, 1962 and last amended by the Income-tax ( 27th Amendment) Rules, 2021, vide notification number G.S.R. 616(E) dated 6th September, 2021.
