Revised the Scope of Slump Sale in Section 50B of the Income-Tax Act 1961 - Finance Act 2021

All Types of Transfer are Covered within the Scope of Slump Sale : Section 50B of the  Income-Tax Act 1961

Finance Minister Nirmala Sitharaman is presenting Union Budget 2021-22 on 1^st Feb 2021, proposed the amendment the provision on section 50B of the Income-tax Act 1961 with reference to scope of application that is all types of transfer are covered within the scope of slumpsale.

Section 50B of the Act contains provision for computation of capital gains in case of slump sale. Section 2(42C) of the Act defines slump sale to mean the transfer of one or more undertakings as a result of sale for lump sum consideration without value being assigned to individual assets and liabilities in such cases.

This has been interpreted by some courts that other means of transfer listed in section 2(47) of the Act like exchange, relinquishment etc, are excluded.

Proposed amendment the scope of the definition of the term slump sale by amending the provision of clause (42C) of section 2 of the Act so that all types of transfer as defined in clause (47) of section 2 of the Act are included within its scope.

Above amendment applied with effect from 1^st April 2021.