Applied direct taxation
This query is : Resolved
29 September 2010
what is slump sale? How is capital gain computed in case of a slump sale?
CA Vinay Gandhi
(Expert)
29 September 2010
Hi Yogesh,
When an assessee sells the whole of his undertaking without specifically determining sale price of each asset of undertaking, then it is called 'Slump sale'.
Tax Implications:-
Section 50B of Income tax act,1961 deals with provisions relating to 'Slump sale'.
Net worth of undertaking is treated as 'Cost of acquisition'
When life of undertaking as a whole is more than 3 years, then it is treated as 'Long term capital asset'irrespective of date of purchase of each individual asset.
When life of whole undertaking is less than 3 years, then it is treated as 'Short term capital asset' irrespective of date of purchase of each individual asset.
All the best.
Hope you understood the concept.
When an assessee sells the whole of his undertaking without specifically determining sale price of each asset of undertaking, then it is called 'Slump sale'.
Tax Implications:-
Section 50B of Income tax act,1961 deals with provisions relating to 'Slump sale'.
Net worth of undertaking is treated as 'Cost of acquisition'
When life of undertaking as a whole is more than 3 years, then it is treated as 'Long term capital asset'irrespective of date of purchase of each individual asset.
When life of whole undertaking is less than 3 years, then it is treated as 'Short term capital asset' irrespective of date of purchase of each individual asset.
All the best.
Hope you understood the concept.
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