Section 44DB of ITA, 1961 : Section 44Db: Special Provision For Computing Deductions In The Case Of Business Reorganisation Of Co-Operative Banks

Explanation using Example

Imagine a scenario where 'Farmers Co-operative Bank' (FCB), a co-operative bank, decides to merge with 'Cultivators Co-operative Bank' (CCB) to form a new entity called 'Agro Co-operative Bank' (ACB) on July 1, 2023. This is considered a business reorganisation. FCB had been eligible for certain tax deductions for depreciation (under section 32) and for certain expenses (under sections 35D, 35DD, and 35DDA) for the financial year 2023-2024.

According to Section 44DB of the Income-tax Act, 1961, the tax deductions available to FCB before the merger must now be split between FCB and ACB based on th...

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