Section 2(1C) → Section 2(7)
Definition of Demerger
Quick Answer
Section 2(1C) of the Income Tax Act, 1961 (Definition of Demerger) corresponds to Section 2(7) of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 2(1C)
Under the Income Tax Act, 1961, Section 2(1C) governs definition of demerger. Defines the transfer of an undertaking to a resulting company on a going concern basis.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 2(1C) is retained and renumbered as Section 2(7) of the Income-tax Act, 2025. Retained. Explicitly updated to cover strategic disinvestment of public sector companies.
The transition impact on Section 2(1C) is assessed as High. Foundation for tax-neutral demergers.
Sec 2(1C)
Provision Summary
Defines the transfer of an undertaking to a resulting company on a going concern basis.
Sec 2(7)
Provision Summary
Retained. Explicitly updated to cover strategic disinvestment of public sector companies.
Key Changes & Highlights
- Relaxations added for PSU demergers.
Related Sections
Frequently Asked Questions
Which subject does Section 2(1C) of the 1961 Act cover?
Section 2(1C) of the Income Tax Act, 1961 covers definition of demerger. Defines the transfer of an undertaking to a resulting company on a going concern basis.
What is the new section number for Section 2(1C) under the Income-tax Act, 2025?
Section 2(1C) of the Income Tax Act, 1961 maps to Section 2(7) of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Explicitly updated to cover strategic disinvestment of public sector companies.
How does the Income-tax Act, 2025 affect Section 2(1C) in practice?
The transition impact for Section 2(1C) is rated High. Foundation for tax-neutral demergers.
What is new about Section 2(1C) under the Income-tax Act, 2025?
Relaxations added for PSU demergers. These points are specific to Section 2(1C) (Definition of Demerger).
Disclaimer: This mapping of Section 2(1C) (Definition of Demerger) to Section 2(7) of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 2(1C) is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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