Section 72A of ITA, 1961 : Section 72A: Provisions Relating To Carry Forward And Set-Off Of Accumulated Loss And Unabsorbed Depreciation Allowance In Amalgamation Or Demerger, Etc
ITA, 1961
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Explanation using Example
Imagine that XYZ Manufacturing Ltd., which owns a factory producing electronics, has been incurring losses for the past four years. The company has accumulated a significant amount of loss and unabsorbed depreciation on its books. Now, XYZ Manufacturing Ltd. decides to amalgamate with ABC Electronics Ltd., a profitable company in the same industry.
According to Section 72A of the Income-tax Act, 1961, the accumulated loss and unabsorbed depreciation of XYZ Manufacturing Ltd. can be carried forward to ABC Electronics Ltd. post-amalgamation. This means t...
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