Set off & Carry Forward
This query is : Resolved
18 June 2008
Can Any one explain me the provisions of Section 79 of the Income TAX Act.
Kindly xplain in own words as i know the language of section in the Bare act.(but could not understand the same)
THANKS
Kindly xplain in own words as i know the language of section in the Bare act.(but could not understand the same)
THANKS
18 June 2008
If you want to know from merger or demerger's point of view then please find below:
Section 79 :which has to be looked into while working out cross-border transactions. Carry forward of losses and their set off is not allowed under the Section in the case of a closely-held company, unless on the last day of the previous year the shares of the company carrying not less than 51 per cent of the voting power are beneficially held by the same persons as on the last day of the previous year in which the loss was incurred.
This requirement of Section 79 will not apply in cases where the shareholding changes in an Indian subsidiary on account of merger or demerger of a foreign company. It is necessary that this relaxation be provided to Indian holding companies too. Section 79 should be made applicable to all cases of mergers and demergers.
Section 79 :which has to be looked into while working out cross-border transactions. Carry forward of losses and their set off is not allowed under the Section in the case of a closely-held company, unless on the last day of the previous year the shares of the company carrying not less than 51 per cent of the voting power are beneficially held by the same persons as on the last day of the previous year in which the loss was incurred.
This requirement of Section 79 will not apply in cases where the shareholding changes in an Indian subsidiary on account of merger or demerger of a foreign company. It is necessary that this relaxation be provided to Indian holding companies too. Section 79 should be made applicable to all cases of mergers and demergers.
18 June 2008
Please consider below points:
1. A company, not being a company in which the public are substantially interested
2. A change in shareholding has taken place in a previous year.
3. Loss incurred in any year (prior to the previous year) shall be carried forward and set off only if -
a. On the last day of the previous year
b. Substantial Shares of the company held by same persons who held shares in the year of Loss.
Substantial share means: - Shares carrying not less than fifty-one per cent of the voting power
Above provisions not applicable: - Where a change in the said voting power takes place consequent upon the death of a shareholder or on account of transfer of shares by way of gift.
1. A company, not being a company in which the public are substantially interested
2. A change in shareholding has taken place in a previous year.
3. Loss incurred in any year (prior to the previous year) shall be carried forward and set off only if -
a. On the last day of the previous year
b. Substantial Shares of the company held by same persons who held shares in the year of Loss.
Substantial share means: - Shares carrying not less than fifty-one per cent of the voting power
Above provisions not applicable: - Where a change in the said voting power takes place consequent upon the death of a shareholder or on account of transfer of shares by way of gift.
18 June 2008
NOw in a case of a pvt ltd co. company as on 01.04.2007 Rs 100000 shares were standing in books. Holded by two directors Rs 50000 each. During the Year Shares were alloted & as on 31.03.2008 the shareholding of the individual directors came down to 1.29% & 25.06%. The company has B/f loss standing on 01.04.2007 as Suppose Rs 1000000 & Unabsorbed dep Rs 125000. in the Year 2007-08 there BF loss on 31.03.2008 becomes 1200000 & unabsorbed dep 150000. No tell what will be the scenario.
losses of which yr will not be Carried forward. does this provision has affect on Unabsorbed Depreciation also.
Akhil
losses of which yr will not be Carried forward. does this provision has affect on Unabsorbed Depreciation also.
Akhil
31 March 2012
Losses for ALL the previous years shall NOT be allowed to be carried forward & set off.
Unabsorbed depreciation shall not be affected as the same is governed by Section 32. Accordingly unabsorbed depreciation can be carried forward & set off.
Unabsorbed depreciation shall not be affected as the same is governed by Section 32. Accordingly unabsorbed depreciation can be carried forward & set off.
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