More firms bid for bankrupt companies after SC removes tax deterrent

While the minimum alternate tax (MAT) is payable, the SC order has helped to clarify on the write-back of loan waivers, said a lender

More companies are coming forward to bid for bankrupt companies after the Supreme Court removed a major deterrent in relation to tax demands made by the tax department vis a vis write back of loan waivers or haircuts. 

Lenders said more companies are enquiring about bidding for stressed assets since the Supreme Court made it clear in January this year that tax is not payable on haircuts taken by lenders which was considered as an income in the hands of the borrower company post takeover. While the minimum alternate tax (MAT) is payable, the SC order has helped to clarify