Disclosure of Information Relating to Carry Forward of Losses in Information Memorandum · IBBI/CIRP/83/2025
IBBI circular IBBI/CIRP/83/2025 · 17 Mar 2025
Official title
Circular- Disclosure of information relating to carry forward of losses in Information Memorandum (IM)
Official record
Open source pageSummary
Check the official recordWhat changed
The Insolvency and Bankruptcy Board of India has issued a directive requiring Insolvency Professionals to enhance disclosures regarding carry forward of losses in the Information Memorandum for corporate debtors. Insolvency Professionals must include a dedicated section in the Information Memorandum that explicitly details the quantum of carry forward losses, a breakdown by tax heads under the Income Tax Act, 1961, and the applicable time limits for utilization. If no such losses exist, the Information Memorandum must explicitly state this fact. This measure aims to provide potential resolution applicants with a clearer understanding of the corporate debtor's financial position to facilitate the development of more informed and viable resolution plans.
What you must do
- Include a dedicated section in the Information Memorandum explicitly detailing the carry forward of losses under the Income Tax Act, 1961.
- Explicitly specify if there are no carry forward of losses available to the corporate debtor.
Document text
Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001
CIRCULAR
No. IBBI/CIRP/83/2025
17th March, 2025
To: All Registered Insolvency Professionals All Recognised Insolvency Professional Entities All Registered Insolvency Professional Agencies (By mail to registered email addresses and on the website of the IBBI)
Dear Madam/Sir,
Subject: Disclosure of information relating to carry forward of losses in Information Memorandum (IM)
The Insolvency and Bankruptcy Board of India (IBBI) had amended Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (‘CIRP Regulations’) to mandate the disclosure of carry forward of losses as per the Income Tax Act, 1961, in the Information Memorandum (IM). Further, Insolvency Professionals (IPs) were also advised to ensure comprehensive capture of details related to carry forward losses and the disclosure thereof.
- Upon review of recent Information Memorandum(s), the Board has observed that disclosure of carry forward of losses by Insolvency Professionals need to be more robust. Accordingly, it is hereby directed that all Insolvency Professionals shall include a dedicated section in the IM explicitly detailing the carry forward of losses under the Income Tax Act, 1961. This section shall prominently highlight, but is not limited to, the following aspects:
a) The quantum of carry forward losses available to the corporate debtor ; b) A breakdown of these losses under specific heads as per the Income Tax Act,1961; c) The applicable time limits for utilizing these losses; and d) If there are no carry forward of losses available to the Corporate debtor , the Information Memorandum should explicitly specify the fact.
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This enhanced disclosure framework is intended to provide potential resolution applicants with a more comprehensive understanding of the corporate debtor’s financial position, enabling them to develop more informed and viable resolution plans while considering the benefits of carry forward losses.
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This is issued in the exercise of the powers conferred under section 196 of the Insolvency and Bankruptcy Code, 2016.
Yours faithfully -Sd/- Jithesh John (Executive Director)
Source details
- Source
- Insolvency and Bankruptcy Board of India
- Type
- circular
- Published by source
- 17 Mar 2025
- Document number
- IBBI/CIRP/83/2025
- Issuing division
- Insolvency and Bankruptcy Board of India
- Coverage area
- insolvency