Slump sale stamp duty
This query is : Resolved
CA abhishek Jain
(Expert)
09 March 2020
Did you get any answer? I have same query!!
25 July 2025
In **Karnataka**, stamp duty on **slump sale** transactions is generally governed by the **Karnataka Stamp Act, 1957**.
### Key points on Stamp Duty for Slump Sale in Karnataka:
1. **Slump Sale** involves transfer of a **business undertaking as a going concern**, including assets and liabilities, for a lump sum consideration without values assigned to individual assets.
2. For stamp duty purposes, **stamp duty is charged on the instrument transferring the business assets**—which could be a sale deed, transfer agreement, or business transfer deed.
3. **Stamp duty rate:**
* The duty is typically calculated on the **market value or consideration amount**, whichever is higher.
* In case of transfer of **immovable property** (land, building) as part of slump sale, the stamp duty on immovable property transfer applies as per usual rates (which can be around 5-6% depending on area and other factors).
* For other assets like machinery, goodwill, stock, the stamp duty can be a **fixed amount or nominal**, but the main charge usually comes from immovable property transfer.
4. **Business Transfer Agreements** (without specific valuation of assets) may attract **stamp duty as a "business transfer" document**, which may have a **fixed or ad-valorem rate** as prescribed under Karnataka Stamp Act or local rules.
5. **Karnataka Stamp Act Sections relevant**:
* Section 3: Instruments chargeable with duty.
* Schedule I and II: May provide specific rates for different documents.
6. **Practical approach:**
* Since slump sale involves multiple assets, the **stamp authorities may value immovable property separately** and levy stamp duty accordingly.
* For other movable assets and goodwill, duty may be based on consideration or a nominal rate.
---
### Recommendation:
* It’s best to get a **stamp duty valuation certificate** from the local sub-registrar office.
* Consult a **local stamp consultant or legal expert** as stamp duty rates and interpretations can vary.
* Also check for any **Government circulars** or **recent amendments** on slump sale stamp duty.
---
If you want, I can help you draft a request for valuation or guide you on how to approach the sub-registrar office in Karnataka.
### Key points on Stamp Duty for Slump Sale in Karnataka:
1. **Slump Sale** involves transfer of a **business undertaking as a going concern**, including assets and liabilities, for a lump sum consideration without values assigned to individual assets.
2. For stamp duty purposes, **stamp duty is charged on the instrument transferring the business assets**—which could be a sale deed, transfer agreement, or business transfer deed.
3. **Stamp duty rate:**
* The duty is typically calculated on the **market value or consideration amount**, whichever is higher.
* In case of transfer of **immovable property** (land, building) as part of slump sale, the stamp duty on immovable property transfer applies as per usual rates (which can be around 5-6% depending on area and other factors).
* For other assets like machinery, goodwill, stock, the stamp duty can be a **fixed amount or nominal**, but the main charge usually comes from immovable property transfer.
4. **Business Transfer Agreements** (without specific valuation of assets) may attract **stamp duty as a "business transfer" document**, which may have a **fixed or ad-valorem rate** as prescribed under Karnataka Stamp Act or local rules.
5. **Karnataka Stamp Act Sections relevant**:
* Section 3: Instruments chargeable with duty.
* Schedule I and II: May provide specific rates for different documents.
6. **Practical approach:**
* Since slump sale involves multiple assets, the **stamp authorities may value immovable property separately** and levy stamp duty accordingly.
* For other movable assets and goodwill, duty may be based on consideration or a nominal rate.
---
### Recommendation:
* It’s best to get a **stamp duty valuation certificate** from the local sub-registrar office.
* Consult a **local stamp consultant or legal expert** as stamp duty rates and interpretations can vary.
* Also check for any **Government circulars** or **recent amendments** on slump sale stamp duty.
---
If you want, I can help you draft a request for valuation or guide you on how to approach the sub-registrar office in Karnataka.
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