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The income Tax Act 1961 is the statute on Income tax in India. It provide for levy, administration, collection, and recovery of income tax. The government proposes to replace the law with a new statute called the Direct Taxes Code. The provision relate to tax concessions to the India Companies that merge/demerge.
3. Shareholders holding at least three-fourths in the value of share of the amalgamating company become shareholder of the amalgamating company .
When companies whose shares are transferred under
the deal are entitled to exemption from capital gains tax under the Indian Income Tax Act.
In case of foreign company mergers, the share allotted to the merged foreign company in place of share surrendered by under the Indian tax laws.(www.articlebase.com)