Finance Minister Proposes To Carry Forward Accumulated Losses & Unabsorbed Depreciation Allowance In Case Of Amalgamation After Strategic Disinvestment

To facilitate certain strategic disinvestments, it was proposed to allow carry forward of accumulated losses and unabsorbed depreciation allowance in the case of amalgamation of one or more banking company with any other banking institution or a company subsequent to a strategic disinvestment, if such amalgamation takes place within 5 years of strategic disinvestment.

It is proposed to amend the definition of ‘strategic disinvestment’ in section 72A so as to provide that strategic disinvestment shall mean sale of shareholding by the Central Government, the State Government or Public Sector Company in a public sector company or a company which results in reduction of its shareholding below 50% and transfer of control to the buyer.

The amendment will take effect from 1st April, 2023 and will apply to the assessment year 2023-24 and subsequent assessment years.

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