India Tax & Regulatory
Section 50B Slump Sale Tax Treatment
Capital gains on a slump sale are taxed against the undertaking's "net worth," not fair value, under Section 50B — one of the most tax-efficient exit routes for promoters holding low-book-value businesses.
Seller Example
Promoter of a Chennai plastics compounding business selling for ₹32 Cr with a book net worth of only ₹5 Cr structures the deal as a slump sale, ensuring capital gains is computed on the ₹5 Cr net worth basis at the long-term rate rather than facing potentially higher item-wise asset sale taxation — materially improving net after-tax proceeds.