Budget 2017 - 18 : Carry forward and set off of loss in case of
certain companies.
The existing provisions of section 79 of the Act,
interalia provides that where a change in shareholding has taken place in a
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 person 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.
In order to facilitate ease of doing business and
to promote start up India, it is proposed to amend section 79 of the Act to
provide that where a change in shareholding has taken place in a previous year
in the case of a company, not being a company in which the public are
substantially interested and being an eligible start-up as referred to in
section 80 -IAC of this Act, loss shall be carried forward and set off against
the income of the previous year, if all the shareholders of such company which
held shares carrying voting power on the last day of the year or years in which
the loss was incurred, being the loss incurred during the period of seven years
beginning from the year in which such company is incorporated, continue to hold
those shares on the last day of such previous year.
This amendment will take effect
from 1st April, 2018 and will, accordingly , apply in relation to the
assessment year 2018-19 and subsequent years.[Clause 32]
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