Need some advise on slump sale of proprietorship to private limited company by different ownership.what are all the consequences in GST and Imcome tax ?
Whay are all the Entries to be passed in both concerns book of accounts.
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Slump sale of proprietorship
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Quick Summary
A slump sale is a transfer of one or more undertakings for a lump sum consideration, without assigning values to individual assets and liabilities.
Here are the consequences and implications in GST and Income Tax: GST Implications:
1. _Tax Liability_: The transfer of business as a going concern is exempt from GST, provided the transferee is registered under GST.
2. _ITC Reversal_: The proprietorship may need to reverse the input tax credit (ITC) claimed on inputs and input services used for the transferred business.
3. _GST Registration_: The private limited company must obtain a new GST registration or transfer the existing registration in its name.
Income Tax Implications:
1. _Capital Gains Tax_: The proprietorship may be liable to pay capital gains tax on the transfer of business, as it is considered a transfer of
Thank you sirfor your advise on this.
Any form or declaration to be made for GST department
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