Strategic Disinvestment

• Vaid's ICS, Lucknow
• 13, Sep 2021

Why in News?

Recently, the Government allowed disinvested PSUs to set off previous losses.

About the recent developments

• In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company that has become so as a result of strategic disinvestment.
• The above relaxation will cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, 51 per cent of the voting power of the erstwhile public sector company.
• Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 that deals with the amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company) as part of strategic disinvestment, with one or more company or companies and carry forward of losses in case of change in shareholding following the sale by the government.

Facts for Prelims:

Thamirabarani or Porunai civilisation

A carbon dating analysis of rice with soil, found in a burial urn at Sivakalai in Thoothukudi district of Tamil Nadu, by the Miami-based Beta Analytic Testing Laboratory has yielded the date of 1155 BC, indicating that the Thamirabarani or Porunai civilisation dates back to 3,200 years.