"In comparison to demerger, slump sale is not generally tax efficient." Comment briefly with any case that had taken place.

The statement is true since any undertaking being transferred, if held for more than 3 years prior to the date of the slump sale, the gains from such a sale would qualify as long-term capital gains, and the effective rate of tax would be 20%. If the undertaking had been held for 3 years or any period lesser than that, prior to the date of slump sale, then the income would be taxable as short-term capital gains, the effective rate of which is currently 30%. Also, any distribution by the company to its shareholders could attract dividend distribution tax. This did not however, prevent the acquisition of Formulation Business from Piramal Health Care Ltd. by Abbott Healthcare Private Limited in 2010.