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Under section 116(1) of the Income-tax Act, 2025, on the amalgamation of a company owning an industrial…

Section 116(1) deems the accumulated loss to be that "of the amalgamated company" for the tax year of amalgamation, subject to the section's conditions. It does not transfer…

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Under section 116(1) of the Income-tax Act, 2025, on the amalgamation of a company owning an industrial undertaking with another company, where the conditions of that section are satisfied, which of the following is true?

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Answer and explanation

Correct answer A

Section 116(1) deems the accumulated loss to be that "of the amalgamated company" for the tax year of amalgamation, subject to the section's conditions. It does not transfer the loss to individual shareholders, and the applicable carry-forward limits continue to govern.

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