We have done a slump sale and the Assessing Officer says the consideration we recorded is not the full value of the consideration. How is the fair market value computed under s.50B, and from when does that apply?
Under rule 11UAE two figures are computed and the higher is taken. Sub-rule (1) provides: "For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher." FMV1 looks at what was transferred and is computed as A+B+C+D-L, where A is the book value of all assets of the undertaking or division other than jewellery, artistic work, shares, securities and immovable property, reduced by income-tax paid less income-tax refund claimed and by any amount shown as an asset, including unamortised deferred expenditure, which does not represent the value of any asset; B is the open market price of jewellery and artistic work on a registered valuer's report; C is the fair market value of shares and securities determined under rule 11UA(1); D is the stamp duty value adopted or assessed or assessable by any Government authority for immovable property; and L is the book value of the liabilities of the undertaking or division, excluding paid-up equity capital, amounts set apart for dividends on preference or equity shares not declared before the date of transfer, reserves and surplus by whatever name called, provisions for taxation, provisions for meeting liabilities other than ascertained liabilities, and contingent liabilities other than arrears of cumulative preference dividend. FMV2 looks at what was received and is computed as E+F+G+H, where E is the monetary consideration received or accruing, F is the fair market value of non-monetary consideration represented by property referred to in rule 11UA(1), determined under rule 11UA(1), G is the open market price on a registered valuer's report of non-monetary consideration being property other than immovable property and not referred to in rule 11UA(1), and H is the stamp duty value where the non-monetary consideration is immovable property. Sub-rule (4) fixes the valuation date: the fair market value under sub-rules (2) and (3) is determined on the date of slump sale, and the valuation date in rule 11UA also means the date of slump sale. The rule was inserted with effect from 24 May 2021, and the clause it serves, s.50B(2)(ii), was substituted with effect from 1 April 2021.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2021-05-24, reported as Rule 11UAE of the Income-tax Rules, 1962, heading "Computation of Fair Market Value of Capital Assets for the purposes of section 50B of the Income-tax Act", transcribed from https://www.incometaxindia.gov.in/w/rule-11uae (no "Year:" stamp; the page prints "Upload Date: 13/12/2025"), with s.50B read on incometaxindia.gov.in/w/section-50b-22 (heading "Special provision for computation of capital gains in case of slump sale", Year: 2022); rule 11UAE inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021, and s.50B(2)(ii) substituted by Act No. 13 of 2021, w.e.f. 1-4-2021, per the footnotes on those pages. It bears on section Rule 11UAE, section 50B, section 50B(3), section Rule 11UA, section Rule 11U, section Rule 11UA(2), section 48, section 49, section 2(42C) of the Income Tax Act 1961, in Capital Gains, Assessment & Scrutiny and How Tax Law Is Read matters.
This library's concept page on rule 11UAE records the notification itself as unverified. That gap is now closed at the level of the rule and the amending footnotes, and the reader should be told exactly how far. What the departmental pages establish is that s.50B(2)(ii) — fair market value of the capital assets as on the date of transfer, calculated in the prescribed manner, deemed to be the full value of the consideration — was substituted by Act No. 13 of 2021 with effect from 1 April 2021, that the section page carries the cross-reference footnote "See rule 11UAE", and that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021. Three practical consequences. First, the two dates are not the same and the gap is deliberate: the charge operates from 1 April 2021, that is assessment year 2021-22, while the machinery rule takes effect from 24 May 2021, so a slump sale in the early part of the previous year 2021-22 is within the amended clause (ii) but the rule prescribing the computation was notified afterwards. Second, FMV2 means that consideration is not a floor but only one of two candidates: an undertaking sold for a negotiated price can still be assessed on FMV1 if the asset-side figure is higher, and the exclusion from L of reserves and surplus and of unascertained and contingent liabilities pushes FMV1 up. Third, three of the eight components turn on someone else's valuation — B and G on a registered valuer's report, D and H on the stamp duty value — so the workings are only as good as those documents, which must be obtained as at the date of slump sale. The library already holds PNB Finance v CIT on the failure of a slump sale computation, Triune Projects v DCIT, and CIT v Equinox Solution; none of them is authority on rule 11UAE, which postdates them.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Rule 11UAE, as printed on the departmental page, provides: "(1) For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher." Sub-rule (2) provides that FMV1 shall be the fair market value of the capital assets transferred by way of slump sale determined in accordance with the formula A+B+C+D-L, where A is the book value of all assets, other than jewellery, artistic work, shares, securities and immovable property, as appearing in the books of account of the undertaking or division transferred by way of slump sale, as reduced by (i) any amount of income-tax paid, less income-tax refund claimed, and (ii) any amount shown as an asset including unamortised deferred expenditure which does not represent the value of any asset; B is the price which the jewellery and artistic work would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer; C is the fair market value of shares and securities determined in the manner provided in sub-rule (1) of rule 11UA; D is the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property; and L is the book value of liabilities appearing in the books of account of the undertaking or division transferred by way of slump sale, but not including (i) the paid-up capital in respect of equity shares, (ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company, (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation, (iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto, (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities, and (vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares. Sub-rule (3) provides that FMV2 shall be the fair market value of the consideration received or accruing as a result of transfer by way of slump sale determined in accordance with the formula E+F+G+H, where E is the value of the monetary consideration received or accruing as a result of the transfer; F is the fair market value of non-monetary consideration received or accruing as a result of the transfer represented by property referred to in sub-rule (1) of rule 11UA, determined in the manner provided in sub-rule (1) of rule 11UA for the property covered in that sub-rule; G is the price which the non-monetary consideration received or accruing as a result of the transfer represented by property, other than immovable property, which is not referred to in sub-rule (1) of rule 11UA would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer, in respect of property; and H is the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property in case the non-monetary consideration received or accruing as a result of the transfer is represented by the immovable property. Sub-rule (4) provides that the fair market value of the capital assets under sub-rule (2) and sub-rule (3) shall be determined on the date of slump sale and for this purpose the valuation date referred to in rule 11UA shall also mean the date of slump sale. The Explanation provides that for the purposes of this rule the expressions "registered valuer" and "securities" shall have the same meanings as respectively assigned to them in rule 11U. The page's footnote reads: "86. Inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021." Section 50B(2), as printed on the departmental page stamped Year 2022, reads: "(2) In relation to capital assets being an undertaking or division transferred by way of such slump sale,— (i) the 'net worth' of the undertaking or the division, as the case may be, shall be deemed to be the cost of acquisition and the cost of improvement for the purposes of sections 48 and 49 and no regard shall be given to the provisions contained in the second proviso to section 48; (ii) fair market value of the capital assets as on the date of transfer, calculated in the prescribed manner, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of such capital asset." That page carries the footnotes "[47] Sub. by the Act No. 13 of 2021, w.e.f. 1-4-2021." and "[48] See rule 11UAE."
Not a judgment. The statutory position is that for the purpose of s.50B(2)(ii) the fair market value of the capital assets is, under rule 11UAE(1), the higher of FMV1 determined under sub-rule (2) and FMV2 determined under sub-rule (3); that FMV1 is computed on the assets transferred as A+B+C+D-L on the components set out in sub-rule (2); that FMV2 is computed on the consideration received or accruing as E+F+G+H on the components set out in sub-rule (3); that under sub-rule (4) both are determined on the date of slump sale, which is also the valuation date for the purposes of rule 11UA; that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021; and that clause (ii) of s.50B(2), which the rule serves, was substituted by Act No. 13 of 2021 with effect from 1 April 2021.
Not a judgment; no judicial reasoning is stated for the section.
For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher.
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Handle my notice → Ask a CA on WhatsAppUnder rule 11UAE two figures are computed and the higher is taken. Sub-rule (1) provides: "For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher." FMV1 looks at what was transferred and is computed as A+B+C+D-L, where A is the book value of all assets of the undertaking or division other than jewellery, artistic work, shares, securities and immovable property, reduced by income-tax paid less income-tax refund claimed and by any amount shown as an asset, including unamortised deferred expenditure, which does not represent the value of any asset; B is the open market price of jewellery and artistic work on a registered valuer's report; C is the fair market value of shares and securities determined under rule 11UA(1); D is the stamp duty value adopted or assessed or assessable by any Government authority for immovable property; and L is the book value of the liabilities of the undertaking or division, excluding paid-up equity capital, amounts set apart for dividends on preference or equity shares not declared before the date of transfer, reserves and surplus by whatever name called, provisions for taxation, provisions for meeting liabilities other than ascertained liabilities, and contingent liabilities other than arrears of cumulative preference dividend. FMV2 looks at what was received and is computed as E+F+G+H, where E is the monetary consideration received or accruing, F is the fair market value of non-monetary consideration represented by property referred to in rule 11UA(1), determined under rule 11UA(1), G is the open market price on a registered valuer's report of non-monetary consideration being property other than immovable property and not referred to in rule 11UA(1), and H is the stamp duty value where the non-monetary consideration is immovable property. Sub-rule (4) fixes the valuation date: the fair market value under sub-rules (2) and (3) is determined on the date of slump sale, and the valuation date in rule 11UA also means the date of slump sale. The rule was inserted with effect from 24 May 2021, and the clause it serves, s.50B(2)(ii), was substituted with effect from 1 April 2021. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section Rule 11UAE, section 50B, section 50B(3), section Rule 11UA, section Rule 11U, section Rule 11UA(2), section 48, section 49, section 2(42C) of the Income Tax Act 1961. It is reported as Rule 11UAE of the Income-tax Rules, 1962, heading "Computation of Fair Market Value of Capital Assets for the purposes of section 50B of the Income-tax Act", transcribed from https://www.incometaxindia.gov.in/w/rule-11uae (no "Year:" stamp; the page prints "Upload Date: 13/12/2025"), with s.50B read on incometaxindia.gov.in/w/section-50b-22 (heading "Special provision for computation of capital gains in case of slump sale", Year: 2022); rule 11UAE inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021, and s.50B(2)(ii) substituted by Act No. 13 of 2021, w.e.f. 1-4-2021, per the footnotes on those pages. This library's concept page on rule 11UAE records the notification itself as unverified. That gap is now closed at the level of the rule and the amending footnotes, and the reader should be told exactly how far. What the departmental pages establish is that s.50B(2)(ii) — fair market value of the capital assets as on the date of transfer, calculated in the prescribed manner, deemed to be the full value of the consideration — was substituted by Act No. 13 of 2021 with effect from 1 April 2021, that the section page carries the cross-reference footnote "See rule 11UAE", and that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021. Three practical consequences. First, the two dates are not the same and the gap is deliberate: the charge operates from 1 April 2021, that is assessment year 2021-22, while the machinery rule takes effect from 24 May 2021, so a slump sale in the early part of the previous year 2021-22 is within the amended clause (ii) but the rule prescribing the computation was notified afterwards. Second, FMV2 means that consideration is not a floor but only one of two candidates: an undertaking sold for a negotiated price can still be assessed on FMV1 if the asset-side figure is higher, and the exclusion from L of reserves and surplus and of unascertained and contingent liabilities pushes FMV1 up. Third, three of the eight components turn on someone else's valuation — B and G on a registered valuer's report, D and H on the stamp duty value — so the workings are only as good as those documents, which must be obtained as at the date of slump sale. The library already holds PNB Finance v CIT on the failure of a slump sale computation, Triune Projects v DCIT, and CIT v Equinox Solution; none of them is authority on rule 11UAE, which postdates them. If it applies to you, the first step is this: Compute both figures. FMV1 under rule 11UAE(2) on the assets transferred and FMV2 under rule 11UAE(3) on the consideration received; sub-rule (1) takes the higher, and a computation that produces only one of them is incomplete.
Rule 11UAE, as printed on the departmental page, provides: "(1) For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher." Sub-rule (2) provides that FMV1 shall be the fair market value of the capital assets transferred by way of slump sale determined in accordance with the formula A+B+C+D-L, where A is the book value of all assets, other than jewellery, artistic work, shares, securities and immovable property, as appearing in the books of account of the undertaking or division transferred by way of slump sale, as reduced by (i) any amount of income-tax paid, less income-tax refund claimed, and (ii) any amount shown as an asset including unamortised deferred expenditure which does not represent the value of any asset; B is the price which the jewellery and artistic work would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer; C is the fair market value of shares and securities determined in the manner provided in sub-rule (1) of rule 11UA; D is the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property; and L is the book value of liabilities appearing in the books of account of the undertaking or division transferred by way of slump sale, but not including (i) the paid-up capital in respect of equity shares, (ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company, (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation, (iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto, (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities, and (vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares. Sub-rule (3) provides that FMV2 shall be the fair market value of the consideration received or accruing as a result of transfer by way of slump sale determined in accordance with the formula E+F+G+H, where E is the value of the monetary consideration received or accruing as a result of the transfer; F is the fair market value of non-monetary consideration received or accruing as a result of the transfer represented by property referred to in sub-rule (1) of rule 11UA, determined in the manner provided in sub-rule (1) of rule 11UA for the property covered in that sub-rule; G is the price which the non-monetary consideration received or accruing as a result of the transfer represented by property, other than immovable property, which is not referred to in sub-rule (1) of rule 11UA would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer, in respect of property; and H is the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property in case the non-monetary consideration received or accruing as a result of the transfer is represented by the immovable property. Sub-rule (4) provides that the fair market value of the capital assets under sub-rule (2) and sub-rule (3) shall be determined on the date of slump sale and for this purpose the valuation date referred to in rule 11UA shall also mean the date of slump sale. The Explanation provides that for the purposes of this rule the expressions "registered valuer" and "securities" shall have the same meanings as respectively assigned to them in rule 11U. The page's footnote reads: "86. Inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021." Section 50B(2), as printed on the departmental page stamped Year 2022, reads: "(2) In relation to capital assets being an undertaking or division transferred by way of such slump sale,— (i) the 'net worth' of the undertaking or the division, as the case may be, shall be deemed to be the cost of acquisition and the cost of improvement for the purposes of sections 48 and 49 and no regard shall be given to the provisions contained in the second proviso to section 48; (ii) fair market value of the capital assets as on the date of transfer, calculated in the prescribed manner, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of such capital asset." That page carries the footnotes "[47] Sub. by the Act No. 13 of 2021, w.e.f. 1-4-2021." and "[48] See rule 11UAE." The matter was decided on 2021-05-24 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Not a judgment. The statutory position is that for the purpose of s.50B(2)(ii) the fair market value of the capital assets is, under rule 11UAE(1), the higher of FMV1 determined under sub-rule (2) and FMV2 determined under sub-rule (3); that FMV1 is computed on the assets transferred as A+B+C+D-L on the components set out in sub-rule (2); that FMV2 is computed on the consideration received or accruing as E+F+G+H on the components set out in sub-rule (3); that under sub-rule (4) both are determined on the date of slump sale, which is also the valuation date for the purposes of rule 11UA; that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021; and that clause (ii) of s.50B(2), which the rule serves, was substituted by Act No. 13 of 2021 with effect from 1 April 2021.
Not a judgment; no judicial reasoning is stated for the section. In the words reproduced by the source cited on this page: "For the purpose of clause (ii) of sub-section (2) of section 50B, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher."
It was decided by the CBDT Circulars & Instructions on 2021-05-24 and is reported as Rule 11UAE of the Income-tax Rules, 1962, heading "Computation of Fair Market Value of Capital Assets for the purposes of section 50B of the Income-tax Act", transcribed from https://www.incometaxindia.gov.in/w/rule-11uae (no "Year:" stamp; the page prints "Upload Date: 13/12/2025"), with s.50B read on incometaxindia.gov.in/w/section-50b-22 (heading "Special provision for computation of capital gains in case of slump sale", Year: 2022); rule 11UAE inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021, and s.50B(2)(ii) substituted by Act No. 13 of 2021, w.e.f. 1-4-2021, per the footnotes on those pages. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section Rule 11UAE, section 50B, section 50B(3), section Rule 11UA, section Rule 11U, section Rule 11UA(2), section 48, section 49, section 2(42C), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Not a judgment. The statutory position is that for the purpose of s.50B(2)(ii) the fair market value of the capital assets is, under rule 11UAE(1), the higher of FMV1 determined under sub-rule (2) and FMV2 determined under sub-rule (3); that FMV1 is computed on the assets transferred as A+B+C+D-L on the components set out in sub-rule (2); that FMV2 is computed on the consideration received or accruing as E+F+G+H on the components set out in sub-rule (3); that under sub-rule (4) both are determined on the date of slump sale, which is also the valuation date for the purposes of rule 11UA; that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021; and that clause (ii) of s.50B(2), which the rule serves, was substituted by Act No. 13 of 2021 with effect from 1 April 2021. It arises in Capital Gains, Assessment & Scrutiny and How Tax Law Is Read matters, on section Rule 11UAE, section 50B, section 50B(3), section Rule 11UA, section Rule 11U, section Rule 11UA(2), section 48, section 49, section 2(42C) of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Fix the valuation date as the date of slump sale under rule 11UAE(4), and obtain the registered valuer's report for jewellery and artistic work under component B, and for non-monetary consideration under component G, as at that date. Build L carefully. The book value of liabilities excludes paid-up equity capital, amounts set apart for undeclared dividends, reserves and surplus by whatever name called, provisions for taxation, provisions for unascertained liabilities and contingent liabilities other than arrears of cumulative preference dividend; every one of those exclusions raises FMV1. Check the dates against the transaction. Section 50B(2)(ii) was substituted by Act No. 13 of 2021 with effect from 1 April 2021 and rule 11UAE was inserted with effect from 24 May 2021, and for a slump sale between those dates take the point that the prescribed manner was notified only later. Keep the net worth computation under s.50B(2)(i) and Explanations 1 and 2 separate from the fair market value computation under clause (ii); net worth is the cost of acquisition, fair market value is the full value of the consideration, and the two are computed on different bases from different documents.
Still good law. The rule text as stated is the current text so far as I could establish, and the limits are these. The departmental page for rule 11UAE carries NO "Year:" stamp — only "Upload Date: 13/12/2025" — so the dating test the brief prescribes for Act pages cannot be run, and I located only ONE departmental page serving this rule, so there is no second edition to compare it against. That is a weaker evidential position than the other entries in this set and the reader should treat it as such. The single footnote on the page records insertion by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021 and records no subsequent amendment; I could not establish from the page whether the rule has been amended since. The section it serves was read on a Year 2022 edition of s.50B, which is the only edition of s.50B I reached, so a later amendment to s.50B cannot be excluded. I did NOT reach the gazette notification for the IT (Sixteenth Amdt.) Rules, 2021 and state no notification number; to that extent the library's existing concept page on rule 11UAE remains unverified at the level of the notification document. I carried out no check of judicial treatment of rule 11UAE on this pass and am not aware of any decision on it in this library. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
WHAT IS NOW ESTABLISHED, and what the library's existing concept page recorded as unverified. Rule 11UAE was transcribed from https://www.incometaxindia.gov.in/w/rule-11uae, heading "Computation of Fair Market Value of Capital Assets for the purposes of section 50B of the Income-tax Act". THE PAGE CARRIES NO "Year:" STAMP; it prints "Upload Date: 13/12/2025". Its single footnote reads: "86. Inserted by the IT (Sixteenth Amdt.) Rules, 2021, w.e.f. 24-5-2021." That footnote is the evidence for the amending instrument and its effective date. Section 50B was read at https://www.incometaxindia.gov.in/w/section-50b-22 (Year: 2022), which prints clause (ii) of sub-section (2) in the terms quoted in this entry and carries the footnotes "[47] Sub. by the Act No. 13 of 2021, w.e.f. 1-4-2021.", "[48] See rule 11UAE.", "[49] See rule 6H and Form No. 3CEA. Under proviso to rule 12(2) audit report shall be furnished electronically.", "[50] Sub. for 'along with the return of income, a report of an accountant as defined in the Explanation below sub-section (2) of section 288,' by the Act No. 12 of 2020, w.e.f. 1-4-2020." and "[51] Ins. by the Act No. 13 of 2021, w.e.f. 1-4-2021." WHAT I COULD NOT ESTABLISH, stated plainly. I did NOT reach the notification itself. The IT (Sixteenth Amdt.) Rules, 2021 are identified in this entry only by the short title and effective date the footnote prints; I did not fetch the gazette notification, I do not state its number or its S.O. number, and the library's existing concept page slump-sale-fair-market-value-rule-11uae-from-ay-2021-22 should be read as remaining unverified at the level of the notification document even though the rule text and the amending footnote are now sourced. I also do NOT state the short title of Act No. 13 of 2021 or of Act No. 12 of 2020; the departmental page gives Act numbers and I give what it gives. NOTE ON THE SHORT TITLE COLLISION: the departmental footnotes attribute both rule 10CA and rule 10B's 2015 amendments to "the IT (Sixteenth Amdt.) Rules, 2015" and rule 11UAE to "the IT (Sixteenth Amdt.) Rules, 2021" — different years, the same ordinal, and the two must not be confused. TRANSCRIPTION LIMIT: the definitions of components A, B, C, D, L, E, F, G and H are given in this entry in the words the departmental page prints for each component, run together as a continuous statement rather than in the page's tabular layout; components F, G and exclusion (iv) from L were re-fetched character for character on a second pass, because an earlier transcription had dropped the words "sub-rule (1) of" from the rule 11UA cross-reference in F and in G, and had truncated exclusion (iv) before the closing words "in accordance with the law applicable thereto" — F and G refer to property referred to, and not referred to, in SUB-RULE (1) of rule 11UA, not to rule 11UA at large, and the narrower cross-reference is what the rule prints; the sub-rule (1) sentence and the Explanation are quoted verbatim. The Explanation reads that for the purposes of this rule "registered valuer" and "securities" have the meanings assigned to them in rule 11U. I did not read rule 11U or rule 11UA on this pass and make no statement about either beyond the cross-reference the rule itself makes. NO FIGURE, RATE OR THRESHOLD is stated in this entry, because rule 11UAE contains none. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Not a judgment. The statutory position is that for the purpose of s.50B(2)(ii) the fair market value of the capital assets is, under rule 11UAE(1), the higher of FMV1 determined under sub-rule (2) and FMV2 determined under sub-rule (3); that FMV1 is computed on the assets transferred as A+B+C+D-L on the components set out in sub-rule (2); that FMV2 is computed on the consideration received or accruing as E+F+G+H on the components set out in sub-rule (3); that under sub-rule (4) both are determined on the date of slump sale, which is also the valuation date for the purposes of rule 11UA; that rule 11UAE was inserted by the IT (Sixteenth Amdt.) Rules, 2021 with effect from 24 May 2021; and that clause (ii) of s.50B(2), which the rule serves, was substituted by Act No. 13 of 2021 with effect from 1 April 2021.
TaxSphere, “Statutory position — rule 11UAE: computation of the fair market value of capital assets for s.50B(2)(ii), FMV1 on the assets transferred and FMV2 on the consideration received, the higher of the two being taken, with effect from 24 May 2021”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-rule-11uae-fair-market-value-for-50b-fmv1-and-fmv2/ (validity last checked 2026-09-17)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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My client is signing a business transfer agreement now. Can I still take the price in the agreement as the full value of consideration for the s.50B computation, the way every reported case does?
My client's start-up took money from an overseas investor. Which valuation methods are open under Rule 11UA, and is there any tolerance if the issue price is a little above the valuation?
I sold an undertaking as a slump sale and its net worth worked out to a negative figure. Do I compute capital gain on the price alone, or does the negative net worth get added to it?
My client's auditor could not upload Form 3CEA with the return and the Assessing Officer has disallowed the whole slump sale loss for that reason alone. Is the report a condition precedent?
