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 Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
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
What does Section 2(1C) of the Income Tax Act 1961 deal with?
Section 2(1C) (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 Direct Tax Code 2025?
Section 2(1C) of the ITA 1961 maps to Section 2(7) of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 2(1C) under the new tax code?
Section 2(1C) is marked as "Retained" with status "Active". Impact: High - Foundation for tax-neutral demergers.
What are the key changes to Section 2(1C) under DTC 2025?
Relaxations added for PSU demergers.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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