The New Income Tax Bill 2025: Is It Really a Game Changer?

The webinar on Key Tax Considerations in M&A Transactions addressed the crucial tax aspects of Mergers and Acquisitions. It began by outlining the primary drivers behind M&A deals before delving into restructuring options and significant tax issues that commonly arise during such transactions.

The session also covered various recent tax developments relevant to M&A, including changes related to slump sales, the reconstitution of partnerships, amendments to the LLP Act, and new regulations. A specific focus was placed on the altered buyback rules following the Finance Act 2024, which now treat buybacks similarly to dividends for tax purposes.

The webinar examined changes in the carry-forward of losses in amalgamation scenarios, noting the limitation of loss carry-forward to 8 years[cite: 137, 138]. It further discussed shifts in valuation rules and angel taxation, highlighting amendments to Rule 11UA and key considerations for determining Fair Market Value (FMV).

Key judicial rulings in M&A transactions were reviewed during the webinar, with analyses of cases such as Ajanta Pharma Limited, Panasonic India Pvt. Ltd., and Cummins Auto Services Ltd., among others.

The importance of tax due diligence was emphasized, with the session outlining what to look for, including understanding the target entity's business, reviewing tax filings, verifying income and deductions, and examining litigation and dispute history. The role of indemnity and warranty clauses in deal documentation was also highlighted.

Finally, the webinar concluded with an explanation of General Anti-Avoidance Rules (GAAR), their applicability, and basic provisions, as well as an overview of indirect transfer provisions.