Amendment of section 72AA.
34. In section 72AA of the Income-tax Act,––
(a) for clause (i), the following clause shall be substituted, namely:––
“(i) one or more banking company with––
(a) any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949); or.
(b) any other banking institution or a company subsequent to a strategic disinvestment, wherein the amalgamation is carried out within a period of five years from the end of the previous year during which such strategic disinvestment is carried out; or”;
(b) in the long line, after the words “such banking institution or”, the words “company or” shall be inserted;
(c) in the Explanation, after clause (vi), the following clause shall be inserted, namely:––
‘(via) “strategic disinvestment” shall have the meaning assigned to it in clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A;’.
Notes on Clauses:
Clause 34 of the Bill seeks to amend section 72AA of the Income-tax Act relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases.
It is proposed to amend clause (i) of the said section to also allow carry forward of accumulated losses and unabsorbed depreciation allowance in the case of amalgamation of one or more banking company with any other banking institution or a company subsequent to a strategic disinvestment, if such amalgamation takes place within five years of strategic disinvestment.
It is further proposed to insert a new clause (via) in the Explanation to the said section to define “strategic disinvestment” by giving reference to the meaning assigned to it in clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A.
This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.