Strategic divestment to get tax deduction for previous losses

To facilitate strategic disinvestment, the finance ministry has decided to allow the private sector company which takes over a public sector company to set off losses of previous years for the purpose of income tax.

However, this relaxation would cease to exist after the private company stops holding 51 per cent in the erstwhile public sector company after strategic disinvestment either directly or through its subsidiaries, the Central Board of Direct Taxes (CBDT) said on Friday.