Skip to content

CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under the Income-tax Act, 2025 (applicable from the June 2027 session), which of the following amalgamations is covered by section 116(1) so that the accumulated loss and unabsorbed depreciation of the amalgamating company can be treated as those of the amalgamated company?

Section 116(1) of the Income-tax Act, 2025 covers the amalgamation of a company owning an industrial undertaking, ship or hotel with another company. Amalgamations of ordinary trading companies are not listed, so they do not get the deemed carry forward of losses and depreciation.

  1. AAmalgamation of a company owning an industrial undertaking with another companyCorrect
  2. BAmalgamation of any two trading companies with each other
  3. CAmalgamation of a partnership firm with a private company engaged in trading
  4. DAmalgamation of a company with its individual shareholder

Explanation

Section 116(1) covers amalgamation of a company owning an industrial undertaking, ship or hotel with another company, besides specified bank and public sector cases. Mere trading companies are not in the list, and a firm or an individual shareholder is not an amalgamating company in this provision.

Did you get it right without looking?

One question tells you little. A timed set on Income Tax Implication on Specified Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Income Tax Implication on Specified TransactionsFree diagnostic mock

More Income Tax Implication on Specified Transactions questions