Ahead of the strategic disinvestment of Air India and fuel retailer-cum-refiner BPCL, the government on Friday said losses incurred by disinvested public sector undertakings (PSUs) in previous years can be carried forward and set off.
“In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment,” the Central Board of Direct Taxes (CBDT) said. “Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company.”
“The above relaxation will cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, 51% of the voting power of the erstwhile public sector company” it said.
Necessary legislative amendments for the above decision shall be proposed in due course of time, CBDT said.