30+ years of combined expertise in complex Indian taxation and compliance.
Discuss your unique tax situation with our senior partners. No obligation.
30+ years of combined expertise in complex Indian taxation and compliance.
Acquisitions, demergers, and slump sales fail when tax liabilities erode the intended deal value. We engineer transaction structures that preserve carry-forward losses, optimize capital gains, and shield founders from deemed-income traps.
Ideal for: Private Equity buyouts, Startups undergoing Acquisition, and Corporate Restructuring.
M&A transactions drafted by corporate lawyers without deep tax substantiation often harbor catastrophic tax liabilities that trigger post-closing.
If shares are sold below Fair Market Value (FMV), the seller is taxed on the FMV. If shares are issued above FMV, the company is taxed on the premium.
Consequence: Double taxation on the perceived "gap" between commercial intent and statutory valuation.
Target companies often have crores in carry-forward losses. Changing 51% shareholding instantly nullifies these tax assets unless specific structuring exceptions (Sec 79/72A) are implemented.
Consequence: Acquiring a company but losing its most valuable deferred tax asset.
Pre-2021, acquirers could claim depreciation on goodwill arising from acquisitions. Post Finance Act 2021, goodwill is no longer a depreciable asset.
Consequence: Vastly reduced post-acquisition cash flows requiring alternative IP valuations.
In amalgamations, the acquirer inherits the tax history of the target. Undisclosed GST mismatches or pending income tax litigations transfer directly to the new entity.
Consequence: Paying crores for past sins committed by the previous management.
Deep-dive forensic review of the target's direct and indirect tax history. We identify pending assessments, aggressive tax positions taken by previous management, deferred tax assets, and unrecorded contingent liabilities.
Modeling the tax consequences of multiple acquisition routes: Slump Sale vs. Itemized Sale vs. Demerger vs. Share Acquisition. We calculate the exact cash-outflow for the buyer and net-in-hand for the seller under each scenario.
Collaborating with corporate counsel to draft airtight tax indemnity clauses in the Share Purchase Agreement (SPA). We design escrow mechanisms to protect the buyer from pre-closing tax liabilities that materialize post-closing.
"M&A is fraught with tax landmines. Sami's team didn't just point out the risks our lawyers missed; they proactively restructured the acquisition vehicle. Their intervention saved the deal from collapsing under what would have been an unexpected ₹15 Crore tax assessment post-closing."
— CFO, Listed Manufacturing Group
Understanding Slump Sales, Demergers, and Valuation Discrepancies.
A slump sale transfers an 'undertaking' as a going concern. An asset sale transfers individual assets.
Slump Sale (Sec 50B)
Asset Sale
Under Section 79, carry-forward losses lapse if 51% or more of voting power changes hands.
However, Sami Tax structures transactions to preserve these highly valuable tax shields through exemptions:
If shares are issued at a premium exceeding their Fair Market Value (FMV), the excess is taxed as income in the hands of the company.
The M&A Trap:
When acquirers inject capital during an acquisition at high strategic valuations, the target company may suddenly face a 30% tax bill on the capital received if it exceeds the mathematically derived FMV.
Sami Tax conducts preemptive valuation syncing (DCF vs NAV) and structures capital injections through preference shares or convertible debt to circumvent punitive Section 56(2) taxation.
A term sheet should never be signed before the tax outcomes are fully modeled. Let us vet your transaction structure to shield deal value.