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Slump sale

Nithish k v (@@@) (31 Points)

09 May 2020

Assessee is declaring income under section 44AD and he sold out all his business. Now wheter that income is taxable under capital gain or business income?

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5 Replies

Kiran Hathalia (837 Points)
Replied 09 May 2020

It will be chargeable under the head Capital Gains.

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Nithish k v (@@@) (31 Points)
Replied 09 May 2020

Since the Assessee has not maintained books how the capital gain arrived sir.?

Kiran Hathalia (837 Points)
Replied 09 May 2020

Slump sale specifies the gain or loss arising from the sale of undertaking without assigning values to the assets.

Harshit Agrawal (2 Points)
Replied 09 May 2020

To tax under capital gains head for slump sale, there is only requirement of Net worth i.e Aggregate value of total assets minus value of liabilities. So, the amount at which business is sold less Net worth will arrive at Capital Gains. And, thereafter capital gains will be charged on the basis of period of holding of business. Why you are getting confuse with the maintenance of books of accounts as we can find the value of given assets and liabilities from market value.