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Two or more Companies Combine to make one company


One Company's business is broken into 2 or more companies

Expenses on Amalagamation/Demerger

On Both Amalgamation or demerger,there are lots of expenses to be incurred like legal fees.

Deduction Allowed under this Section regardng such expenses as mentioned below


Deduction Under Section 35DD

1.This deduction only available to Indian companies(not to foreign companies)

2.This deduction is available in 5 years  equally starting with the year in which Amalgamation / demerger takes place.

(1/5 every year)

3. No deduction available regarding this expenses in any other Section .

4.Deduction available to Company who pays the expense

  Section 35 DD Expenditure on Amalgamation/ Demerger - Deductions



A ltd got merged with B ltd.A ltd ceased to exist and business was run by B ltd in future.

Suppose Amalgamation expenses were Rs 3 lacs which were incurred by A ltd

Calculate Amt of deduction available each year if profit and loss of A ltd was

Proft and Loss of A Ltd  
SALES 6000000
EXPENSES 4000000
PROFIT 2000000


View Answer
  1. Income Tax
  2. PGBP Income
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .