The slump sale remains India’s dominant structuring tool for business transfers. The definitional expansion of Section 2(42C) to cover transfers “by any means” brought slump exchanges within the capital gains net. Rule 11UAE introduced a dual-valuation floor (FMV1 and FMV2) that creates real pricing consequences depending on whether consideration is cash, equity, or hybrid instruments. The negative net worth question remains genuinely unresolved, with Summit Securities and Zuari Industries pulling in different directions on narrower facts than most practitioners assume.
My article published on Taxsutra, maps the full landscape across commercial, tax, legal and regulatory aspects, with a particular focus on three structural advantages the scheme route offers over a BTA (appointed date flexibility, pre-qualification credential transfer, and a materially lower stamp duty outcome under the Maharashtra framework).
The piece also addresses the entity-level cash trap in cash-consideration slump sales, which makes the slump sale vs. demerger choice fundamentally a question about where value should land and in what form.
The technical architecture exists to serve the commercial decision, not to drive it.