Tax concessions favour revival of loss-making units

The Indian tax regime offers several concessions for mergers and amalgamations.

One of the key concessions is the transfer of unabsorbed losses and unabsorbed depreciation in amalagamations.

Section 72 A of the Income Tax Act, 1961, provides that whenever there is an amalgamation, the amalgamated company will be allowed to carry forward and set off accumulated losses and unabsorbed depreciation of the amalgamating company, subject to various conditions prescribed under the act.

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