Page 60 - DHC Budget Book 2021-22 Final
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4.4
Facilitating strategic disinvestment of public sector company [Sec. 2(19AA), Sec. 72A] [w.r.e.f. AY 2021-22]
Sec. 2(19AA) defines “demerger” and lays down several conditions which needs to be satisfied
for fulfilling the definition of demerger under the
IT Act.
Sec. 72A of the Act provides provisions relating to carry forward and set off of accumulated
loss and unabsorbed depreciation allowance
in amalgamation or demerger etc. In order to facilitate strategic disinvestment of public sector companies, above provisions are proposed to be relaxed.
In Sec. 2(19AA), Explanation 6 is proposed to be inserted to clarify that reconstruction or splitting up of a public sector company into separate companies shall be deemed to be demerger, if all the following conditions are satisfied:-
Such reconstruction or splitting up has been made to transfer any asset of demerged company to resultant company; and
Resultant company is a public sector company on appointed date indicated in the scheme approved by the government or any other body authorised under Companies Act, 2013 or any other Act governing such public sector companies; and
Fulfills such other conditions as may be notified by the CG.
Scope of Sec. 72A is proposed to be enlarged via the following amendments:-
Substitution of clause (c) of Sec. 72A(1)
to provide that it shall be applicable on amalgamation of all public sector company with other public sector company instead of only public sector company which is engaged in the business of operation of aircraft.
Insertion of clause (d) in Sec. 72(A)(1)
to provide that provisions of Sec. 72A(1) shall also be applicable on amalgamation of an erstwhile public sector company
with other company(s) provided the share purchase agreement entered into under strategic disinvestment (resulting in reduction of government shareholding to below 51% alongwith transfer of control) restricted immediate amalgamation and the amalgamation is carried out within 5 yrs from the end of the previous year in which restriction on amalgamation ends.
Insertion of proviso to Sec. 72A(1) to provide that accumulated loss and unabsorbed depreciation of erstwhile public sector company as per clause (d) above shall not exceed accumulated loss and unabsorbed depreciation as on the date on which it ceases to be public sector company as result of strategic disinvestment.
INDIA BUDGET 2021-22
4.5 Rationalisation of provisions of Minimum Alternate Tax (MAT) [Sec. 115JB] [w.r.e.f. AY 2021-22]
Sec. 115JB does not provide for any adjustment for additional income of earlier year(s) included in books of account of current year on account of secondary adjustment u/s 92CE or on account of an Advance Pricing Agreement entered into by the assessee u/s 92CC. It is proposed to insert new sub-section (2D) to
Sec. 115JB to provide that where income of any earlier year(s) is included in the books
of accounts of current year on account of Secondary Adjustment u/s 92CE or Advance Pricing Agreement u/s 92CC, the assessee may file an application before the AO and the AO shall accordingly re-compute Book Profit of
such earlier year(s) and tax payable during the previous year in the prescribed manner.
It is also proposed that for the purpose of determining time limit for making rectification order u/s 154 for such earlier year, the period of 4 years specified in Sec. 154(7) shall be reckoned from the end of FY in which such application is received by the AO.
Hitherto, clause (iid) of Explanation 1 to Sec. 115JB provides that any income from capital gains on transfer of securities, interest, royalty and Fee for Technical Services (FTS) accruing or arising to a foreign company, shall be reduced
58 Building a Resilient and Confident India
