Changes in tax norms on slump sale deals may lead to litigation for firms

Changes will impact several M&A transactions, including internal restructuring by companies which were signed since April 2020.

Topics
Mergers & Acquisitions | tax litigation | taxes

Dev Chatterjee  |  Mumbai 

M&A transactions signed in the current fiscal year will have to take into account the amended financial bill, which has said the net worth for computation of capital gains tax on slump sale basis deals will be on the basis of the full market value of the asset and not the consideration received by the buyer. Tax computation will not include goodwill and the cost of acquisition to be regarded for any self-generated goodwill be considered as zero.

This will lead to increased litigation with the companies objecting to the fair market value formula. The new norms will impact several ...

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First Published: Thu, March 25 2021. 18:09 IST
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