## Slump Sale [Section 50B]
### Meaning
Slump Sale = Transfer of one or more business undertakings / divisions / units as a going concern for a lump-sum consideration, without assigning individual values to assets and liabilities.
### Capital Gain Computation
| Particulars | Amount |
|---|---|
| Sale Consideration (FMV of unit transferred) | XX |
| (-) Transfer Expenses | (XX) |
| Net Sale Consideration | XX |
| (-) Cost of Acquisition (Net Worth of unit) | (XX) |
| Capital Gain (STCG / LTCG) | XX |
LTCG if the undertaking is owned for > 36 months; otherwise STCG.
### Sale Consideration — FMV of Unit
Higher of FMV-1 or FMV-2 on the date of slump sale:
- FMV-1 = Market value of assets and liabilities of the unit transferred (Rule 11UAE)
- FMV-2 = Consideration agreed for the transfer
### Cost of Acquisition — Net Worth of Unit
| Item | Value to be taken |
|---|---|
| Depreciable Assets | WDV as per Income-tax Act (not book value) |
| Section 35AD Assets (capital expenditure fully deducted) | Nil |
| Self-generated Goodwill | Nil |
| Other Assets | Book Value |
| (-) Book Value of Liabilities of the unit | XX |
Important Rules:
- Ignore revaluation of assets — revaluation reserve does not increase net worth
- Do NOT subtract: Paid-up Share Capital, Reserves & Surplus (these are not 'liabilities' of the unit)
### Net Worth Can Be Negative
If liabilities exceed assets, net worth can be negative — but for slump sale purposes, negative net worth is treated as Nil (and the entire sale consideration becomes capital gain). [Memorandum to Finance Act, 2021]