Business Standard

Amendments to the Finance Bill 2021 plug tax loophole in slump sale

Amendments to the finance Bill, 2021, say that fair market value (FMV) will be taken as consideration of the sale

nirmala sitharaman
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Finance Minister Nirmala Sitharaman | Photo: PTI

Indivjal Dhasmana New Delhi
Finance Minister Nirmala Sitharaman has plugged the loophole on sale of an undertaking by one entity or person to another, which may have repercussions for business transfers as well as mergers and acquisitions.
 
At present, consideration of slump sale is the amount agreed between seller and buyer, which often leads to leakage of tax. Slump sale refers to sale of an entire undertaking instead of individual assets.
 
Amendments to the finance Bill, 2021, say that fair market value (FMV) will be taken as consideration of the sale.
 
Current provisions sometimes result in a situation where valuable assets

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First Published: Mar 25 2021 | 1:21 AM IST

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