As per the rules, companies have to follow a particular methodology while valuing assets whenever they undertake a slump sale. However, many companies that have undertaken restructuring through slump sale followed the transfer pricing mechanisms to value assets.
Listed companies that undertook slump sale may have to restate earnings following new rules
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The new slump sale rules have a precise methodology that a company is required to use while calculating the valuation of the slump sale transaction. In most cases, this would mean that companies would see the transaction value go up, along with the tax liability.
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In some cases, internal restructuring and inter-group transactions too are being done through this method.
Listed companies that have undertaken slump sales and declared their results will have to recalculate the tax paid or the amount they have provisioned for such transactions, requiring the firms to restate earnings.
Status quo signals stability in tax regime: Experts
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Last Updated: Feb 01, 2021, 10:00 PM IST
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Surprising everyone, especially the markets which closed with the biggest Budget-day gains of 5 per cent, the Budget left all taxes unchanged barring for some cess to fund the farm sector or increase any direct taxes. All it did was to tweak the customs and excise duties on certain products to rationalise them.
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MUMBAI: Taxation experts have opined that making no major changes in the tax structure signal a strong resolve to have stability in the tax regime and at the same time, expressed the hope that the government returns to fiscal consolidation sooner than later.