CBDT Notification on Conditions for Deemed Demerger of Erstwhile Public Sector Company (PSU)
The CBDT has notified conditions for deemed demerger of erstwhile Public Sector Company (PSU) by way of Reconstruction or Splitting up as a result of transfer of its shares by the Central Govt., as under:
CBDT Notification No. 93/2016 dt. 14 Oct. 2016 F. No.149/251/2015-TPL
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.