Slump sale refers to sale of entire business of an undertaking as a whole
for a lumpsum consideration. In case of slump
sale, the purchase consideration should
be arrived at without assigning
individual values to individual assets
and individual liabilities.
Note: If the values of assets and liabilities have been determined individually only for
the purpose of payment of stamp
duty, registration fees
or other similar
taxes, such transaction would still be covered under
the scope of 'slump sale'.
of Capital Gains
Capital gains shall be taxable in the year in which
the undertaking has been sold.
The amount of capital gains
shall be computed as follows:
at which Undertaking has been sold
Less: Expenses in
connection with sale
of Undertaking Less: Net-Worth of the Undertaking
Capital Gains (ST/LT)
gains would arise
if the undertaking was owned
by the assessee
for a period of 36 months or less.
Long-term capital gains would
arise if the undertaking was owned by the assessee
for a period exceeding 36 months. Benefit
of indexation would
not be available in such cases.
Calculate Net-Worth of the Undertaking
Net Worth = Total Assets
(-) Total Liabilities
In case of depreciable assets, their WDV shall be taken into consideration whereas
for other non-depreciable assets, their book values shall
be taken into
Revaluation of assets shall
be completely ignored.
• Where the full cost of an asset
has been allowed
as deduction u/s 35AD, its value shall
be taken as NIL at the time
of computation of net worth.
• All the liabilities payable shall
be taken into
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