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CS Professional · Corporate Restructuring, Valuation and Insolvency · Taxation and Stamp Duty Aspects of Corporate Restructuring

Ganga Pharma Ltd effects a slump sale during the tax year. Its finance head says the net worth computation need not be certified since the buyer has paid a fixed lump sum. Which statement is correct under the Income-tax Act, 2025?

An accountant's report is mandatory. Every assessee effecting a slump sale must furnish, in the prescribed form and before the specified date, a report computing the net worth and certifying that it is correctly arrived at. No holding-period or price condition exempts it.

  1. AThe assessee must furnish an accountant's report in the prescribed form, with net worth computation and certification, before the specified dateCorrect
  2. BCertification is needed only when the gain is short-term
  3. CA report is needed only if the sale price exceeds net worth by more than 10%
  4. DNo report is needed if the buyer deducts tax at source

Explanation

Section 77(4) requires every assessee in a slump sale to furnish an accountant's report in the prescribed form before the specified date, including the net worth computation and a certificate that it has been correctly arrived at. It is not conditional on the holding period, price margin or tax deduction by the buyer.

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