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Nov 20, 2017
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Corporates fret over grey areas in Insolvency Code
Corporate houses vying for stressed assets under the NCLT-led process have expressed deep concern over grey areas in the new Insolvency and Bankruptcy Code, even as the deadline nears for the submission of expressions of interest (EoIs). While banks are gearing up to write off a sizeable portion of the loans, the companies in the race to acquire sick companies have to declare the remainder of the debt as profit and pay income tax on it. For instance, if a company takes over a sick unit after lenders write off Rs.20,000 crore of the overall recognised bad debt of Rs.50,000 crore, the remaining Rs.30,000 crore will reflect as profit on the sick company’s book, and this will attract income tax at 35 per cent, said a tax expert.
Source -
http://www.thehindubusinessline.com
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