Income Tax Act, 2025
Section 4: Subs. by Act 32 of 2003, s. 33, for sub-section (2) (w.e.f. 12004).
4. Subs. by Act 32 of 2003, s. 33, for sub-section (2) (w.e.f. 12004).
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(ii) continues the business of the amalgamating company for a minimum period of five years
from the date of amalgamation;
(iii) fulfils such other conditions as may be prescribedto ensure the revival of the business of
the amalgamating company or to ensure that the amalgamation is for genuine business purpose.]
(3) In a case where any of the conditions laid down in sub-section (2) are not complied with, the set
off of loss or allowance of depreciation made in any previous year in the hands of the amalgamated
company shall be deemed to be the income of the amalgamated company chargeable to tax for the year in
which such conditions are not complied with.
(4) Notwithstanding anything contained in any other provisions of this Act, in the case of a demerger,
the accumulated loss and the allowance for unabsorbed depreciation of the demerged company shall—
(a) where such loss or unabsorbed depreciation is directly relatable to the undertakings
transferred to the resulting company, be allowed to be carried forward and set off in the hands of the
resulting company;
(b) where such loss or unabsorbed depreciation is not directly relatable to the undertakings
transferred to the resulting company, be apportioned between the demerged company and the
resulting company in the same proportion in which the assets of the undertakings have been retained
by the demerged company and transferred to the resulting company, and be allowed to be carried
forward and set off in the hands of the demerged company or the resulting company, as the case may
be.
(5) The Central Government may, for the purposes of this Act, by notification in the Official Gazette,
specify such conditions as it considers necessary to ensure that the demerger is for genuine business
purposes.
(6) Where there has been reorganisation of business, whereby, a firm is succeeded by a company
fulfilling the conditions laid down in clause (xiii) of section 47 or a proprietary concern is succeeded by a
company fulfilling the conditions laid down in clause (xiv) of section 47, then, notwithstanding anything
contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the
predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or
allowance for depreciation of the successor company for the purpose of previous year in which business
reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss
and allowance for depreciation shall apply accordingly:
Provided that if any of the conditions laid down in the proviso to clause (xiii) or the proviso to
clause (xiv)to section 47 are not complied with, the set off of loss or allowance of depreciation made in
any previous year in the hands of the successor company, shall be deemed to be the income of the
company chargeable to tax in the year in which such conditions are not complied with.
1[(6A) Where there has been reorganisation of business whereby a private company or unlisted public
company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso
to clause (xiiib) of section 47, then, notwithstanding anything contained in any other provision of this Act,
the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be
(w.e.f. 12004).
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continues the business of the amalgamating company for a minimum period of five years
from the date of amalgamation;
fulfils such other conditions as may be prescribedto ensure the revival of the business of
the amalgamating company or to ensure that the amalgamation is for genuine business purpose.]
In a case where any of the conditions laid down in sub-section
are not complied with, the set
off of loss or allowance of depreciation made in any previous year in the hands of the amalgamated
company shall be deemed to be the income of the amalgamated company chargeable to tax for the year in
which such conditions are not complied with.
Notwithstanding anything contained in any other provisions of this Act, in the case of a demerger,
the accumulated loss and the allowance for unabsorbed depreciation of the demerged company shall—
where such loss or unabsorbed depreciation is directly relatable to the undertakings
transferred to the resulting company, be allowed to be carried forward and set off in the hands of the
resulting company;
where such loss or unabsorbed depreciation is not directly relatable to the undertakings
transferred to the resulting company, be apportioned between the demerged company and the
resulting company in the same proportion in which the assets of the undertakings have been retained
by the demerged company and transferred to the resulting company, and be allowed to be carried
forward and set off in the hands of the demerged company or the resulting company, as the case may
be.
The Central Government may, for the purposes of this Act, by notification in the Official Gazette,
specify such conditions as it considers necessary to ensure that the demerger is for genuine business
purposes.
Where there has been reorganisation of business, whereby, a firm is succeeded by a company
fulfilling the conditions laid down in clause
of section 47 or a proprietary concern is succeeded by a
company fulfilling the conditions laid down in clause
of section 47, then, notwithstanding anything
contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the
predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or
allowance for depreciation of the successor company for the purpose of previous year in which business
reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss
and allowance for depreciation shall apply accordingly:
Provided that if any of the conditions laid down in the proviso to clause
or the proviso to
clause
Where there has been reorganisation of business whereby a private company or unlisted public
company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso
to clause
of section 47, then, notwithstanding anything contained in any other provision of this Act,
the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be