Do India’s Amalgamation Revisions Prevent Misuse of Accumulated Losses?

Volume 5 Number 5    |    Read Article

By CA Anjali Kukreja (guest author)

India’s recent Finance Act addressed a tax planning device intended to reduce or eliminate the imposition of the Dividend Distribution Tax (“D.D.T”) that applies when a corporation exercises the right to distribute dividends to shareholders. The statue targets plans involving an amalgamation between a profitable company and a loss company and prevents the reduction of earnings when the profitable company is the acquiring company. Does this mean that earnings can be reduced when the loss company is the acquiring company? Differing views have been expressed by Indian tax advisers. CA Anjali Kukreja of R.N. Marwah & Co L.L.P., New Delhi, examines both views and explains why one view is technically preferable.    See more →