Affluence Advisory
Quick Summary
As per the definition of slump sale u/s 2(42C) of the Income Tax Act, 1961, transfer of one or more undertakings for a lump-sum consideration without assigning the separate value to the individual assets and liabilities. This is the most preferred way of business structuring in Indian tax and corpor
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FAQ :
A slump sale is defined as the transfer of one or more undertakings for a lump-sum consideration, where individual assets and liabilities are not assigned separate values.
Capital gain is computed by deducting the 'net worth' of the undertaking (considered as the cost of acquisition) from the sale consideration, which is the fair market value (FMV) of the undertaking.
Accumulated business losses and unabsorbed depreciation do not transfer to the buyer; the seller retains these. Depreciation in the year of sale is apportioned based on usage days by both parties.
Yes, a slump sale is considered a supply under GST. However, it's treated like a 'transfer as a going concern,' which generally attracts a nil rate of GST.
A report from a Chartered Accountant in Form 3CEA is required, indicating the computation of net worth and certifying its correctness, submitted before the ITR filing due date.
Yes, Section 180 of the Companies Act, 2013, requires a special resolution from shareholders if the slump sale involves the disposal of the whole or substantially the whole undertaking.
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