The Statutory Brief

IT Act 1961 → 2025 / Section 50B

Capital gains

Section 50B → Section 77

Capital gains on slump sale of an undertaking

Section 50B of the old Income-tax Act, 1961 · new section 77 under the Income-tax Act, 2025

New reference Section 77

Income-tax Act, 1961Section 50B

  • Gains on slump sale taxed as LTCG (STCG if undertaking held 36 months or less)
  • Net worth deemed as cost; FMV deemed as consideration
  • Accountant's report in Form 3CEA

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 77

  • Same rules, now section 77
  • 36-month holding test retained (77(2))
  • Net worth as cost; prescribed FMV as consideration (77(3))
  • Accountant's report by the section 63 specified date (77(4))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; computation unchanged.

Practice notes

  • Revaluation of assets is ignored for net worth.
  • Goodwill not purchased is taken at nil in net worth.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is section 50B called in the new Income Tax Act 2025?

Section 77: slump sale gains taxed as long-term (short-term if held 36 months or less), with net worth as cost.

What is section 50B called in the new Income-tax Act, 2025?

Section 50B of the Income-tax Act, 1961 corresponds to Section 77 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 50B under the new Income Tax Act?

Renumbered; computation unchanged.

Is section 50B still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 50B of the 1961 Act. Section 77 of the 2025 Act applies from tax year 2026-27.

Related sections

48→72How capital gains are computed: sale value less transfer expenses and cost45→67Charge of capital gains: when a transfer gives rise to taxable gains112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)