CBDT clarification may help Air India deal take off easily

As a sweetener to privatize the ailing national carrier Air India Ltd, the Central Board of Direct Taxes (CBDT) on Friday said that the buyer of a state-run company can carry forward losses of the erstwhile state-owned company and claim up to 30% tax rebate.

“In order to facilitate strategic disinvestments, 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. Accordingly, the 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.