Income-tax Act, 2025 | Section 65
Section 65 - Interpretation for purposes of section 64
This section defines the entities and transactions used in the co-operative-bank reorganisation rules.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Section 65: operativeEffective 1 April 2026Tax Year 2026-27 onwardReviewed 8 October 2026
Current-law controlSection 65 is presented using the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The general commencement date is 1 April 2026. Earlier years and saved proceedings may remain governed by the Income-tax Act, 1961 and the repeal/savings framework.
2-minute professional decode
This section defines the entities and transactions used in the co-operative-bank reorganisation rules.
Professional checkpoint: Apply the provision only after checking the defined person, tax year, evidence, thresholds and any connected Rule or Schedule.
Who should test this section?
Section 65 should be tested by businesses, professionals, non-residents and advisers whenever the computation touches interpretation for purposes of section 64; the special rule must be checked before the ordinary business-profit machinery is applied.
Evidence to retain
For section 65, retain the contracts, ledgers, invoices, banking evidence, prescribed reports and computation papers that specifically prove the factual trigger and quantum for interpretation for purposes of section 64.
1961 Act bridge
| Legacy provision | Legacy heading | Mapping |
|---|
| 44DB | Special provision for computing deductions in the case of business reorganization of co- operative banks. | Renumbered / mapped |
The bridge is a research aid. Legacy case law carries over only after the current wording and transition rules are matched.
Rules and forms linked to this section
No provision-specific Rule was independently mapped from the current Rules register for this section. That does not mean the wider Rules are irrelevant.
Worked application
Prepare a hypothetical transaction involving interpretation for purposes of section 64. Identify the person, tax year, trigger, evidence and connected provision first; then apply section 65 step-by-step and document why each statutory condition is or is not met.
Common mistake
A recurring section 65 error is to carry the book or ordinary tax treatment into interpretation for purposes of section 64 without first testing the provision-specific override, eligibility conditions and linked Rule/Form requirements.
Compliance approach
Identify the statutory trigger for section 65, lock the relevant tax year, reconcile the facts to the operative sub-section, preserve the evidence trail and separately test every linked Rule, Form, Schedule and exception before finalising the return position.
Numeric / timing checkpoints in the operative text
- (ii) the members holding 75% or more voting rights in the amalgam- ating co-operative bank become members of the amalgamated co-operative bank;
- and (iii) the shareholders holding 75% or more in value of the shares in the amalgamating co-operative bank (other than the shares held by the amalgamated co-operative bank or its nominee or its subsidiary, immediately before the merger) become shareholders of the amal- gamated co-operative bank;
- (iv) the shareholders holding 75% or more in value of the shares in the demerged co-operative bank (other than shares already held by the resulting bank or its nominee or its subsidiary immediately before the transfer), become shareholders of the resulting co-operative bank, otherwise than as a result of the acquisition of...
Current statutory text
65. For the purposes of section 64,—
(a) “amalgamation” means the merger of an amalgamating co-operative
bank with an amalgamated co-operative bank, if—
(i) all the assets and liabilities of the amalgamating co-operative bank
or banks immediately before the merger (other than the assets
transferred, by sale or distribution on winding up, to the amalga-
mated co-operative bank) become the assets and liabilities of the
amalgamated co-operative bank;
(ii) the members holding 75% or more voting rights in the amalgam-
ating co-operative bank become members of the amalgamated
co-operative bank; and
(iii) the shareholders holding 75% or more in value of the shares in the
amalgamating co-operative bank (other than the shares held by the
amalgamated co-operative bank or its nominee or its subsidiary,
immediately before the merger) become shareholders of the amal-
gamated co-operative bank;
(b) “amalgamating co-operative bank” means—
(i) a co-operative bank which merges with another co-operative bank;
or
(ii) every co-operative bank merging to form a new co-operative bank;
(c) “amalgamated co-operative bank” means—
(i) a co-operative bank with which one or more amalgamating co-op-
erative banks merge; or
(ii) a co-operative bank formed as a result of merger of two or more
amalgamating co-operative banks;
(d) “business reorganisation” means reorganisation of business involving
the amalgamation or demerger of a co-operative bank or conversion of
a primary co-operative bank;
(e) “conversion” means transition of a primary co-operative bank to a
banking company under the scheme of the Reserve Bank of India as
may be notified vide its circular number DCBR. CO. LS. PCB. Cir. No.
5/07.01.000/2018-19, dated 27th September, 2018;
(f) “converted banking company” means a banking company formed as a
result of conversion from primary co-operative bank;
(g) “demerger” means the transfer by a demerged co-operative bank of one
or more of its undertakings to any resulting co-operative bank, in such
manner that—
(i) all the assets and liabilities of the undertaking or undertakings
immediately before the transfer become the assets and liabilities
of the resulting co-operative bank;
(ii) the assets and the liabilities are transferred to the resulting co-op-
erative bank at values (other than change in the value of assets
consequent to their revaluation) appearing in its books of account
immediately before the transfer;
(iii) the resulting co-operative bank issues, in consideration of the trans-
fer, its membership to the members of the demerged co-operative
bank on a proportionate basis;
(iv) the shareholders holding 75% or more in value of the shares in the
demerged co-operative bank (other than shares already held by the
resulting bank or its nominee or its subsidiary immediately before
the transfer), become shareholders of the resulting co-operative
bank, otherwise than as a result of the acquisition of the assets of
the demerged co-operative bank or any undertaking thereof by the
resulting co-operative bank;
(v) the transfer of the undertaking is on a going concern basis; and
(vi) the transfer is as per the conditions specified by the Central Gov-
ernment, by notification, having regard to the necessity to ensure
that the transfer is for genuine business purposes;
(h) “demerged co-operative bank” means the co-operative bank whose
undertaking is transferred, pursuant to a demerger, to a resulting bank;
(i) “predecessor co-operative bank” means the amalgamating co-operative
bank or the demerged co-operative bank, or the primary co-operative
bank, which has been succeeded as a result of conversion;
(j) “primary co-operative bank” shall have the meaning assigned to it in
clause (ccv) of section 56 of the Banking Regulation Act, 1949 (10 of
1949);
(k) “resulting co-operative bank” means—
(i) one or more co-operative banks to which the undertaking of the
demerged co-operative bank is transferred in a demerger; or
(ii) any co-operative bank formed as a result of demerger;
(l) “successor co-operative bank” means the amalgamated co-operative bank
or the resulting bank.
Primary-source trail
Source status: full Section 65 statutory text in the local source corpus; reconciled to the current consolidated Act control on 8 October 2026.