Amalgamation and Demerger of shipping companies - Section 115VY & Section 115VZ - Income Tax - Ready Reckoner - Income Tax

Amalgamation and demerger of shipping companies Amalgamation - Section 115VY Where there has been an amalgamation of a company with another company or companies, then, subject to the other provisions of this section, the provisions relating to the tonnage tax scheme shall, as far as may be, apply to the amalgamated company if it is a qualifying company. Situation Consequences 1. Where the amalgamated company is not a tonnage tax company at the time of amalgamation but amalgamated company is a qualifying company It shall exercise an option for tonnage tax scheme u/s 115VP(1) within 3 months from the date of the approval of the scheme of amalgamation 2. Where the amalgamating companies are tonnage tax companies All the provisions of this Chapter shall, as far as may be, apply to the amalgamated company for such period as the option for tonnage tax scheme which has the longest unexpired period continues to be in force 3. Where one of the amalgamating companies is a qualifying company as on 1-10-2004 and which has not exercised the option for tonnage tax scheme within the initial period i.e. upto 31-12-2004 The provisions of this Chapter shall not apply to the amalgamated company and the income of the amalgamated company from the business of operating qualifying ships shall be computed in accordance with the other provisions of this Act. Demerger - Section 115VZ Where in a scheme of demerger, the demerged company transfers its business to the resulting company before the expiry of the option for tonnage tax scheme, then, subject to the other provisions of this Chapter, the tonnage tax scheme shall, as far as may be, apply to the resulting company for the unexpired period if it is a qualifying company. However, the option for tonnage tax scheme in respect of the demerged company shall remain in force for the unexpired period of the tonnage tax scheme if it continues to be a qualifying company.