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Slump Sale
In simple terms, a "slump sale" refers to the transfer of an entire or a part of a business as a complete and ongoing operation.
In accordance with Section 50B of the Income Tax Act, 1961 read with rule 11UAE, two distinct fair valuations are mandated. The first involves the formula driven valuation, certificate is obtained by a Merchant Banker. The second pertains to the valuation of consideration received, which must be carried out by a qualified merchant banker or registered valuer.
Provisions for Unlisted Companies
Compliance with Income Tax Act 1961
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Governed by Section 50B of the Income Tax Act, 1961, read with applicable rules.
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Valuation Certificate requirement: An unlisted company must obtain a valuation certificate from a Category 1 Merchant and a Registered Valuer.
Provisions for Listed Companies
Compliance with Income Tax Act 1961
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Governed by Section 50B of the Income Tax Act, 1961, read with applicable rules.
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Valuation Certificate requirement: An unlisted company must obtain a valuation certificate from a Category 1 Merchant and a Registered Valuer.
Key Points to Consider
01
Which is the governing law for Unlisted
Income Tax Act 1961
02
Which is the governing law for listed
Income Tax Act 1961
03
Who does the Valuation
Merchant Banker and Registered Valuer
04
When valuation is required
At the time of Transfer of Securities
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