Loss-making PSUs more attractive for buyers after income tax tweak

Investor must retain at least 51% stake to take the benefit

The government has tweaked the income tax laws to make it easier for the new owners of loss-making public sector undertakings (PSUs) to carry forward the accumulated losses and set them off against future profits.
 
This will result in significant tax savings for the new owners if they are able to turnaround operations of the ailing PSU within a few years. This will, in turn, boost the post-tax earnings and returns for the new owners.
 
The new provision will also result in significant tax savings for the acquirers if their existing business is highly profitable and they pay