The Insolvency and Bankruptcy Board of India (IBBI) has implemented new guidelines requiring insolvency professionals to divulge details of carry-forward losses under Income Tax norms in the information memorandum during insolvency proceedings.
The recent circular mandated that all Information Memorandums must feature a section specifically addressing the quantum of losses eligible for carry forward under the Income Tax Act, 1961. This amendment to regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, aims to enhance transparency.
The IBBI emphasized the necessity for insolvency professionals to comprehensively document carry forward losses. Following a review, inconsistencies were noted, leading to these directives. The updated disclosure framework is set to empower potential resolution applicants by offering a fuller understanding of the financial standing of corporate debtors, thus facilitating informed resolution plan development.
IBBI Enhances Transparency in Insolvency Process with Tax Loss Disclosure
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