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Demerger C/f Time limit?

Whizkid (student) (640 Points)

09 October 2010

In case of Demerger, For how many years can the losses of "resulting Co" (earlier suffered before demerger) be carry forwarded ..? (Like in case of Amalgamation,even though the Selling company had been Carrying forward its business losses for say 3yrs, Post amalgamtion..it can c/f for Further new 8 yrs ..Likewise telme the position for Demerger..)

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VINEET NAHATA (STUDENT) (107 Points)
Replied 10 October 2010

UNLIKE AMALGMATION IN DEMERGER THE RESULTING CO. CAN CARRY FORWARD LOSSES ONLY FOR THE UNEXPIRED PERIOD OUT OF THE TOTAL PERMISSIBLE PERIOD OF 8 YRS.

HOWEVER IT NEEDS MENTION THAT UNABSORBED DEPRECIATION CAN BE CARRIED FORWARD FOR AN INDEFINITE PERIOD.

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Sunshine (Helping All) (10575 Points)
Replied 10 October 2010

In case of amalgamation,conversion of propreitership or partnership firm to a company, fresh 8 years are allowed to carry forward the losses ....but in case of demerger losses of the demerged company can be carried forward only for the UNEXPIRED PERIOD nd unabsorbed depreciation for a lifetime...