Indicate briefly the tax concessions available to a demerged company in terms of Income Tax, 1961.

A Demerged Company can expect the following tax concessions are as under: Capital gains tax not attracted [Section 47(vib)] Where there is a transfer of any capital asset in case of a demerger by the demerged company to the resulting company, such transfer will not be regarded as a transfer for the purpose of capital gain provided the resulting company is an Indian company. Tax concession to a foreign demerged company [Section 47(vic)] Where a foreign company holds any shares in an Indian company and transfers the same, in case of a demerger, to another resulting foreign company, such transaction will not be regarded as transfer for the purpose of capital gain under section 45 if the following conditions are satisfied: The shareholders holding not less than three-fourths in value of the shares of the demerged foreign company continue to remain shareholders the resulting foreign company; and such transfer does not attract tax on capital gains in the country, in which the demerged foreign company is incorporated. Reserves for shipping business: Where a ship acquired out of the reserve is transferred in a scheme of demerger, even within the period of eight years of acquisition there will be no deemed profits to the demerged company.