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Abstract
This research paper is the amalgamation of the Companies Act and the Income tax Act. In this research paper we come to know how demerger as a business tool used by the corporate houses in the emerging global corporate world. For the sake of long term profit business enterprises would not hesitate to giveup short term profit that’s why business enterprises split our undertakings into different parts. Golden rule of interpretation says that if we want’s to know the intention of the drafters of any Act, we find out its intention with the help of it language they used in the provision of Act. Provisions of the Income tax Act, 1961 reflects that government of India also likes to provide some sort of tax relief to both demerged company and resulting company. It is not an easy task for both the companies to avail the taxing benefits that are provided under the Income tax Act.