Rules 54, 55, and 56 of the Draft Income-tax Rules, 2026 prescribe procedural and definitional provisions relating to slump sale reporting, valuation references, and fair market value (FMV) determination.
Rule 54 mandates that in cases of slump sale under Section 77(4), the assessee must submit a report from an accountant in Form No. 28 along with the income tax return.
Rule 55 lays down conditions for reference to a Valuation Officer under Section 91(1)(b)(i), specifying that such reference may be made where the value of the asset varies by 15% and the difference amounts to Rs. 10 lakh.
Rule 56 defines key expressions for FMV determination under this rule and Rule 57. It clarifies the meaning of “balance sheet” for Indian and foreign companies, defines “merchant banker” as a SEBI-registered Category I merchant banker, and explains terms such as quoted shares, recognized stock exchange, registered dealer, registered valuer, securities, unquoted shares and securities, and valuation date. The valuation date varies depending on the relevant section, including Sections 92, 79, and 26(2)(j), as specified in the rule.
Extract of Rule No. 54, 55 and 56 of Draft Income-tax Rules, 2026
Rule 54
Form of report of an accountant in respect of slump sale
6H. In case of a slump sale under section 77(4), every assessee is required to submit a report from an accountant in Form No. 28 along with the income tax return.
Rule 55
Conditions for reference to Valuation Officers under Section 91(1)(b)
For the purposes of Section 91(1)(b)(i),-
(a) the percentage of the value of the asset shall be 15%; and
(b) the amount shall be Rs. 10 lakh.
Rule 56
Meaning of expressions used in determination of fair market value.
For the purposes of this rule and rule 57, —
(a) “balance sheet”, in relation to any company, means, —
(i) in relation to an Indian company, the balance sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor of the company appointed under the laws relating to companies in force; and
(ii) in relation to a company, not being an Indian company, the balance sheet of the company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date which has been audited by the auditor of the company, if any, appointed under the laws in force of the country in which the company is registered or incorporated;
(b) “merchant banker” means category I merchant banker registered with Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(c) “quoted shares or securities” in relation to shares or securities means a share or security quoted on any recognized stock exchange with regularity from time to time, where the quotations of such shares or securities are based on current transaction made in the ordinary course of business;
(d) “recognized stock exchange” shall have the same meaning as assigned to it in section 2(f) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(e) “registered dealer” means a dealer who is registered under Central Sales Tax Act, 1956 or General Sales Tax Law for the time being in force in any State including value added tax laws;
(f) “registered valuer” shall have the same meaning as assigned to it in section 513;
(g) “securities” shall have the same meaning as assigned to it in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(h) “unquoted shares and securities”, in relation to shares or securities, means shares and securities which are not quoted shares or securities;
(i) “valuation date” means the date provided in the Table below:
| Sl. No |
Section | Valuation date |
| 1 | Section 92 | Date on which property or consideration, as the case may be, referred to in section 92 is received by the assessee. |
| 2 | Section 79 | Date on which the capital asset, being share of a company other than a quoted share, referred to in section 79, is transferred. |
| 3 | Section 26(2)(j) | Date on which the inventory is converted, or treated, as a capital asset. |
