Section 79 of income tax act

• Home • About Us • Services • Securitization • Housing Finance • Leasing • Funds Advisory • NBFC Advisory • Fintech Startups • Corporate laws • Resources • Research • Books • Our Newsletters • Sparsh • Sampada • Samagrata • Corporate Law Updates • Downloadable Resources • Workshop & Training • Vinod Kothari & Company • Contact Us • Search By Devika Agrawal, Executive, Vinod Kothari and Company [email protected] Background The preamble to the Insolvency and Bankruptcy Code, 2016 (‘Code’) enlists value maximisation as one of its key objectives. In line with the said objective, the Code included ‘Going Concern Sale’ (‘GCS’) of the corporate debtor or the business of the corporate debtor in liquidation, vide the Amendment dated 22nd October, 2018 [1] in the Liquidation Process Regulations, as one of the modes of sale. The underlying intent of introducing GCS in liquidation was to maximise value. It was expected that introduction of GCS in liquidation would give a breather and will be looked forward to by Corporate Debtors undergoing liquidation process, however, the statistics presented by the Quarterly Newsletter of the IBBI, for the quarter ended 30th September, 2021 [2] give a different view as only six out of the 1419 orders for commencement of liquidation, were closed by a sale as a going concern under liquidation process. For an enhanced understanding of a GCS, our Articles on the topic can be referred to. [3] One probable reason for lesser use of GCS may be tax co...

Section 79 of the Income-tax Act, 1961 (‘Act’) provides conditions for carry forward and set off of losses in case of a company not being a company in which the public are substantially interested and certain other companies . Introduction Under section 79(1) , no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than 51 per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than 51 per cent of the voting power on the last day of the year or years in which the loss was incurred. In other words, in case of change in shareholding of a closely held company which has incurred loss, at least 51% of the shareholders shall remain the same as on the end of the PY in which loss was incurred and at the end of the PY in which such loss is set off. Section 79(2) lists out certain cases where the provisions of section 79(1) shall not apply . In other words, as per section 79(2), even if there is a change in shareholding of a closely held company and the old shareholding falls below 51%, still, carry forward and set off of losses shall be allowed to such a company. Background of the provisions Section 79 of the Act provides for carry forward and set-off of losses in case of certain companies. Sub-section (1) of the said section, inter-alia, provides t...

Introduction: ♦ As per Section 2 of the Income Tax Act, 1961 definition of Income includes losses also. ♦ Losses in the Income Tax Act, 1961 are dealt in accordance with Chapter VI of the Act which consist of Section 70 to Section 80. ♦ Assessee paid tax on Total Income. It might be possible that assessee earn income from one source of Income & Losses from other sources of income under the same head. For Example: Losses from business A & Income from business B under the same head i.e. P/G/B/P. ♦ Similarly, it might also possible that the net result of one head is Losses & on the other hand Assessee earn positive income from other head. For Example: Net losses from House Property is Rs 1.8 Lacs & net income from business head is Rs 4 Lacs. ♦ Similarly, it might also possible that net result is total losses during the Previous year after considering all the five heads. ♦ Section 70 to Section 80 deals with the treatment of losses under Income Tax Act, 1961. ♦ This chapter is divided into two parts: Part A – Set off Losses i.e. Set off of Current Year Losses. Part – B – Carry Forward & Set off Losses i.e. in the Next Assessment Year ♦ Further Part A is divided into two Parts: Set off within same head of Income in the Current Assessment Year. Set off against other head of Income in the Current Assessment Year. ♦ Therefore, Sequence of the treatment of the Losses is as under: > Set off the Losses of one source of Income with another source of income within same head in the curr...

What is Carry forward and set off of losses in the case of certain companies Submission of return for losses? Section 79 and 80 of Income Tax Act 1961 Carry forward and set off of losses in the case of certain companies Submission of return for losses are defined under section 79 and 80 of Income Tax Act 1961. Provisions under these Sections are: Section 79 of Income Tax Act "Carry forward and set off of losses in the case of certain companies" 79. (1) Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place during the previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred: Provided that even if the said condition is not satisfied in case of an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior to the previous year shall be allowed to be carried forward and set off against the income of the previous year if all the shareholders of such company who held shares carrying voting ...

• Home • About Us • Services • Securitization • Housing Finance • Leasing • Funds Advisory • NBFC Advisory • Fintech Startups • Corporate laws • Resources • Research • Books • Our Newsletters • Sparsh • Sampada • Samagrata • Corporate Law Updates • Downloadable Resources • Workshop & Training • Vinod Kothari & Company • Contact Us • Search By Devika Agrawal, Executive, Vinod Kothari and Company [email protected] Background The preamble to the Insolvency and Bankruptcy Code, 2016 (‘Code’) enlists value maximisation as one of its key objectives. In line with the said objective, the Code included ‘Going Concern Sale’ (‘GCS’) of the corporate debtor or the business of the corporate debtor in liquidation, vide the Amendment dated 22nd October, 2018 [1] in the Liquidation Process Regulations, as one of the modes of sale. The underlying intent of introducing GCS in liquidation was to maximise value. It was expected that introduction of GCS in liquidation would give a breather and will be looked forward to by Corporate Debtors undergoing liquidation process, however, the statistics presented by the Quarterly Newsletter of the IBBI, for the quarter ended 30th September, 2021 [2] give a different view as only six out of the 1419 orders for commencement of liquidation, were closed by a sale as a going concern under liquidation process. For an enhanced understanding of a GCS, our Articles on the topic can be referred to. [3] One probable reason for lesser use of GCS may be tax co...

What is Carry forward and set off of losses in the case of certain companies Submission of return for losses? Section 79 and 80 of Income Tax Act 1961 Carry forward and set off of losses in the case of certain companies Submission of return for losses are defined under section 79 and 80 of Income Tax Act 1961. Provisions under these Sections are: Section 79 of Income Tax Act "Carry forward and set off of losses in the case of certain companies" 79. (1) Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place during the previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred: Provided that even if the said condition is not satisfied in case of an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior to the previous year shall be allowed to be carried forward and set off against the income of the previous year if all the shareholders of such company who held shares carrying voting ...

Section 79 of the Income-tax Act, 1961 (‘Act’) provides conditions for carry forward and set off of losses in case of a company not being a company in which the public are substantially interested and certain other companies . Introduction Under section 79(1) , no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than 51 per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than 51 per cent of the voting power on the last day of the year or years in which the loss was incurred. In other words, in case of change in shareholding of a closely held company which has incurred loss, at least 51% of the shareholders shall remain the same as on the end of the PY in which loss was incurred and at the end of the PY in which such loss is set off. Section 79(2) lists out certain cases where the provisions of section 79(1) shall not apply . In other words, as per section 79(2), even if there is a change in shareholding of a closely held company and the old shareholding falls below 51%, still, carry forward and set off of losses shall be allowed to such a company. Background of the provisions Section 79 of the Act provides for carry forward and set-off of losses in case of certain companies. Sub-section (1) of the said section, inter-alia, provides t...

Introduction: ♦ As per Section 2 of the Income Tax Act, 1961 definition of Income includes losses also. ♦ Losses in the Income Tax Act, 1961 are dealt in accordance with Chapter VI of the Act which consist of Section 70 to Section 80. ♦ Assessee paid tax on Total Income. It might be possible that assessee earn income from one source of Income & Losses from other sources of income under the same head. For Example: Losses from business A & Income from business B under the same head i.e. P/G/B/P. ♦ Similarly, it might also possible that the net result of one head is Losses & on the other hand Assessee earn positive income from other head. For Example: Net losses from House Property is Rs 1.8 Lacs & net income from business head is Rs 4 Lacs. ♦ Similarly, it might also possible that net result is total losses during the Previous year after considering all the five heads. ♦ Section 70 to Section 80 deals with the treatment of losses under Income Tax Act, 1961. ♦ This chapter is divided into two parts: Part A – Set off Losses i.e. Set off of Current Year Losses. Part – B – Carry Forward & Set off Losses i.e. in the Next Assessment Year ♦ Further Part A is divided into two Parts: Set off within same head of Income in the Current Assessment Year. Set off against other head of Income in the Current Assessment Year. ♦ Therefore, Sequence of the treatment of the Losses is as under: > Set off the Losses of one source of Income with another source of income within same head in the curr...