Tax Benefits of Amalgamation of Indian Companies
Tax Benefits of Amalgamation of Indian Companies Definition: Amalgamation as a merger of one or more companies into another company or a merger of two or more companies to form a new company such that: - all the properties and liabilities of the merging companies immediately before the amalgamation become the properties and liabilities of the amalgamated company. - shareholders holding at least three-quarters of the shares in the amalgamating companies become shareholders of the amalgamated company (any shares already held by the amalgamated company or its nominees are excluded for purposes of this calculation). Key Takeaways: Ø Tax Neutrality for company- No capital gain implications [sec 47 (vi)]; depreciation shifts to amalgamated company. Ø Tax neutrality for shareholders-no transfer on a/c of amalgamation [sec 47 (vii)] holding period is also inclusive Ø Carry forward of losses and accumulated d...