Quick Summary
Rationalisation of provisions related to carry forward of losses in case of amalgamation Section 72A and 72AA of the Act provide provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in cases of amalgamation or business reorganization as specified therein. 2. Section 72A and 72AA provide that accumulated loss of the amalgamating entity or predecessor entity shall be deemed to be the loss of the amalgamated entity or the successor entity fo
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FAQ :
The provisions for carrying forward accumulated losses and unabsorbed depreciation in cases of amalgamation are being rationalised. A time limit of eight assessment years from the year the loss was first computed will now apply.
The amendments are proposed to bring clarity and parity with existing provisions, and importantly, to prevent the 'evergreening' of losses through successive amalgamations.
These amendments will apply to any amalgamation or business re-organisation that is effected on or after 1st April 2025.
The amendments will take effect from 1st April 2026.
Any loss deemed to be the loss of the successor entity can be carried forward for a maximum of eight assessment years, succeeding the assessment year for which the loss was first computed for the original predecessor entity.
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