Slump Sale Tax: FMV, Net Worth and Accountant Report
Reviewed by CA Nikhil Gupta · Last reviewed 5 August 2026
For a slump sale, fair market value determined under the prescribed rule is deemed consideration and net worth is deemed cost.
Revaluation is ignored, and an accountant report is required before the specified date.
For the connected rule or filing step, see Personal Net Worth Calculator.
Legal or Computational Framework
Governing rule
Section 77 of the 2025 Act consolidates the slump-sale computation. Self-generated goodwill enters net worth at nil; depreciable assets use tax WDV and other assets generally use book value.
Correct calculation method
Identify the undertaking; calculate FMV1/FMV2; use higher deemed consideration; compute statutory net worth; classify holding period; furnish the report.
Step-by-step workflow
- Identify the undertaking.
- calculate FMV1/FMV2.
- use higher deemed consideration.
- compute statutory net worth.
- classify holding period.
- furnish the report.
Worked example
Contract price ₹12 crore, prescribed FMV ₹14 crore and net worth ₹8 crore produce a ₹6 crore gain before applicable adjustments, not ₹4 crore.
The example is an illustration, not a substitute for the taxpayer's facts. A change in status, period, payment mode, document, city, asset, relationship or scheme can change the result.
Why generic pages get this wrong
Search pages often state a rate or limit without identifying the governing base. The calculation must distinguish gross receipt from taxable profit, tax from TDS, a deduction from an exemption, salary from business income, and an accounting entry from the tax treatment.
Decision matrix
| Decision point | Required treatment |
|---|---|
| Legal year | Use the Act, rules and notification effective for the income or transaction period |
| Taxpayer category | Confirm residence, age, entity, employee/business status and regime |
| Calculation base | Use the statutory definition rather than CTC, net bank receipt or accounting label |
| Ceiling or rate | Apply actual-amount, percentage, shared, lifetime and gross-income limits in sequence |
| Documentation | Link every input to an invoice, statement, contract, certificate or official record |
| Final output | Show tax, surcharge, cess, interest and TDS/TCS credits separately |
Entity and topical coverage
This page is written around the entities and concepts search engines expect for the topic: goodwill, slump sale, section 77, fair market value, net worth. They are used only where relevant and are connected to the live calculator and knowledge hub rather than repeated mechanically.
What Generic Pages Miss
- Claiming depreciation on goodwill.
- Accepting contract allocation without valuation.
- Ignoring prior depreciation.
- Confusing itemised and slump sale.
- Omitting accountant report.
Practical Documentation Checklist
- Business transfer agreement
- Valuation report
- Asset/liability schedule
- Tax WDV and net worth
- Prior depreciation record
- Accountant report
For the complete rules on this topic, see the core guide: Goodwill Tax on Business Sale: Cost, Gain and No Depreciation.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Finin2min Summary
For a slump sale, fair market value determined under the prescribed rule is deemed consideration and net worth is deemed cost. Revaluation is ignored, and an accountant report is required before the specified date.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in
Page source links
Primary sources & related provisions
Statutory provisions referenced in this guide: