What Is Slump Sale? | Msme Registration Services

By Author: Nishant Arora
Total Articles: 23
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A single entity could have separate segments or undertakings with its own set of assets and liabilities each focused on a different business. Therefore, when the need arises, the entity can sell off a segment or the undertaking. This is called a slump sale.

CONTENTS

Slump Sale under Income Tax
Tax Effect in a Slump Sale
Slump sale vs. Itemized sale
Case study
Other matters
Slump Sale under Income Tax
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A slump sale for income tax purposes would be one where an undertaking is sold without considering the individual values of the assets or liabilities contained within the undertaking.

It may be important to note here that finding out individual values may be of relevance only for the purpose of determining stamp duty or any other similar taxes.

(Applicable in case of Land & Building transferred along with the respective undertaking)

Tax Effect in a Slump Sale
The gain or loss resulting out of a slump sale shall be a Capital Gain/Loss under the Income Tax Act.

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