CBDTNotificationS.O. 3204(E)14 Oct 2016

Deemed Demerger Specification for Former Public Sector Companies

Who: A company which ceased to be a public sector company as a result of transfer of its shares by the Central Government.
Action: Transfer assets of the demerged company to the resulting company to give effect to the conditions in the Share Holders Agreement and Share Purchase Agreement.

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What changed

The Central Government specifies that the reconstruction or splitting up of a company into separate companies is a demerger under section 2 of the Income-tax Act 1961. This rule applies to any company that ceases to be a public sector company due to a transfer of its shares by the Central Government. The splitting up must transfer assets to the resulting company to satisfy conditions in the Share Holders Agreement and Share Purchase Agreement. The resulting company must be a public sector company.

What you must do

Transfer assets of the demerged company to the resulting company to give effect to the conditions in the Share Holders Agreement and Share Purchase Agreement.

Key dates

Date of publication in the Gazette of India: Not dated

Who is affected

A company which ceased to be a public sector company as a result of transfer of its shares by the Central Government.

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Written automatically from the official document. It is not a professional review, so check material decisions against the official record.

Document text

Prepared for reading; wording retained from the source.

Official source

2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 14th October, 2016 (INCOME-TAX) S.O. 3204(E).— In exercise of the powers conferred by Explanation 5 to clause (19AA) of section 2 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that the reconstruction or splitting up of a company which ceased to be a public sector company as a result of transfer of its shares by the Central Government, into separate companies, shall be deemed to be a demerger if the following conditions are fulfilled, namely:—

(i) that such reconstruction or splitting up has been made to transfer any assets of the demerged company to the resulting company to give effect to the conditions mentioned in the Share Holders’ Agreement and Share Purchase Agreement; and
(ii) that the resulting company is a public sector company. [Notification No. 93/2016, No.149/251/2015-TPL] PRAVIN RAWAL, Director (Tax Policy and Legislation)

Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054. HARINDRA KUMAR Digitally signed by HARINDRA KUMAR Date: 2016.10.17 16:03:25 +05'30'

Source details

Official title: notification no. 93/2016 no.149/251/2015 tpl / so 3204 e section 2 19aa of the income tax act 1961 demerger notified demerger
Source: Central Board of Direct Taxes / Income Tax Department
Type: notification
Published by source: 14 Oct 2016
Document number: S.O. 3204(E)
Issuing division: Central Board of Direct Taxes
Coverage area: direct-tax

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Deemed Demerger Specification for Former Public Sector Companies

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