Budget 2021: Significant impact on past and future M&A transactions

Five ways in which FM Nirmala Sitharaman's announcements will change the tax dynamics of merger & acquisitions and corporate restructuring in the country

Amid the current economic scenario, Union Budget 2021 was keenly awaited. There were speculations on what steps the Government would take towards economic recovery and whether they would affect people in the form of increased tax rates or introduction of cess. The budget focused on six key areas for growth – health and well-being, financial capital and infrastructure, inclusive growth, human capital, innovation and R&D, and minimum government and maximum governance. On the corporate tax front, no increase in tax rates brings relief for corporates. 

Depreciation on goodwill – impact on past transactions

From a transactions/restructuring perspective, some important proposals have been