In what is being seen as a move to expedite the privatisation of Air India, the Central Board of Direct Taxation (CBDT) has mentioned that the buyer of a former state-run company can carry forward its losses and even claim up to 30 per cent of tax rebate on an annual basis.
The Union Finance Ministry has clarified that the required legislative amendments to bring about this new development will be proposed in ‘due course of time’.
“Accordingly, the loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company,” the ministry’s official release read, as reported by the Mint.
The statement revealed that the Section 79 of the Income Tax Act, 1961 will not apply to a former public sector company, ‘which has become so as a result of strategic disinvestment’.
Air India has apparently suffered losses every year since its merger with the Indian Airlines in 2007-08. It has recorded losses worth Rs 70,920 crore till 30th March, 2020.
The central government is targeting rounding up the sale of Air India prior to the end of the current fiscal and the Tata Group seems to be the prime contender to purchase the ailing airline.