Govt. should ease mergers and acquisitions norms: CII | SupportBiz

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Govt. should ease mergers and acquisitions norms: CII

 
In a pre-budget memorandum to the finance ministry, the Confederation of Indian Industry (CII) has urged the government to relax the regulations related to mergers and acquisitions to encourage companies revamp their business operations.

The trade body asked the government to extend the tax benefits upon mergers (under Section 72A of the Income Tax Act), availed by some sectors like industrial undertakings, shipping, hotels, aircraft and banking to other business segments including telecom, financial services, entertainment, sports, information technology (IT) and IT-enabled services as well.

Section 72A of the Income Tax Act encourages amalgamation and restructuring of a company or firms by allowing setting-off or carrying forward unabsorbed depreciation and accumulated business losses when merged with other company. According to CII, by making business operations tax-neutral, the government can motivate other industries like information technology, financial services and entertainment to opt for amalgamations.