Section 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 5 of the Competition Act, 2002 says when an acquisition, an acquisition of control, or a merger or amalgamation is a "combination" that the Commission regulates. It does this through asset and turnover limits, printed in the Act itself. The Competition (Amendment) Act, 2023 adds two new clauses: clause (d), a test based on the value of the transaction, and clause (e), which takes small targets out of Section 5.
As per the consolidated text of the Act published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023. A deal is a combination if it meets the asset or turnover test in clause (a), (b) or (c), at party level or at group level. The 2023 Act adds clause (d): a transaction whose value exceeds rupees two thousand crore, if the target has substantial business operations in India as specified by regulations, and clause (e): a target below a prescribed value is not a combination. The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked.
What Section 5 does
The opening words say that "The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises, if" one of the listed clauses is met. Clause (a) is for an acquisition, clause (b) for an acquisition of control by a person who already controls another enterprise in the same or a substitutable line of business, and clause (c) for a merger or amalgamation. Clause (d) is new in 2023, and so is clause (e). Whether a combination must be notified, and when it may take effect, is in Section 6; see our article on notice of combination.
If a transaction you are planning is near any of these limits, a financial and legal due diligence review of assets, turnover and group structure is a sensible early step.
The asset and turnover thresholds as printed
The figures below are given only as printed in the Act. They can be revised by notification of the Central Government under Section 20(3), which provides for enhancing or reducing the value of assets or turnover for the purposes of Section 5. No such notification is in the sources consulted, so the current notified values should be checked before relying on the figures.
| Level measured | In India only | In India or outside India, in aggregate |
|---|---|---|
| Parties to the acquisition; enterprise acquired together with the enterprise already controlled; enterprise remaining after merger or created by amalgamation | Assets of the value of more than rupees one thousand crores, or turnover more than rupees three thousand crores | Assets of the value of more than five hundred million US dollars, including at least rupees five hundred crores in India, or turnover more than fifteen hundred million US dollars, including at least rupees fifteen hundred crores in India |
| The group to which the enterprise would belong after the acquisition, control, merger or amalgamation | Assets of the value of more than rupees four thousand crores, or turnover more than rupees twelve thousand crores | Assets of the value of more than two billion US dollars, including at least rupees five hundred crores in India, or turnover more than six billion US dollars, including at least rupees fifteen hundred crores in India |
Each limb is satisfied by either the "India only" limit or the "India or outside India" limit, and by either assets or turnover. The same numbers apply in all three of clauses (a), (b) and (c); what differs is who is measured:
- Clause (a): the parties to the acquisition (the acquirer and the enterprise acquired) jointly; or the group to which the enterprise acquired would belong after the acquisition.
- Clause (b): the enterprise over which control has been acquired, together with the enterprise over which the acquirer already has direct or indirect control, jointly; or the group to which the enterprise whose control has been acquired would belong after the acquisition.
- Clause (c): the enterprise remaining after the merger or created by the amalgamation; or the group to which it would belong.
The meaning of "group", "control" and the way assets and turnover are valued comes from the Explanation to Section 5, which the 2023 Act substitutes; see our article on control, group, turnover and value of assets.
Example. Veda Packaging Ltd, with a group that crosses one of the group-level figures above, agrees to acquire control of Rangoli Labels LLP. Whether the deal is a combination is tested against clause (a) at party level and group level; if neither limb is met, the asset and turnover tests do not make it a combination, and clause (d) must then be looked at.
Two printing slips
In clause (b)(ii)(A) the consolidated text ends the sub-item with "crores or" and no semicolon. In clause (c)(ii)(B) the bracket opened for the sub-item is not closed and the clause ends "in India" with no punctuation or "; or". The 2023 Act (its Section 6(A)) substitutes the words "India; or" for the word "India." in clause (c)(ii)(B), which is consistent with that sub-item being followed by new clauses. We read the clause as printed and the amended end of the clause as "India; or". As a single history line, the 2007 amendment inserted the words "including at least" the rupee amounts in India into each of the foreign-limb items; the rule is the one printed above.
New clause (d): value of the transaction
The 2023 Act (Section 6(B)) inserts after clause (c): "(d) value of any transaction, in connection with acquisition of any control, shares, voting rights or assets of an enterprise, merger or amalgamation exceeds rupees two thousand crore: Provided that the enterprise which is being acquired, taken control of, merged or amalgamated has such substantial business operations in India as may be specified by regulations."
Three points follow. First, the test is the value of the transaction, not the assets or turnover of the parties. Second, the value is measured for acquisition of control, shares, voting rights or assets, or a merger or amalgamation. Third, the proviso requires that the target has "such substantial business operations in India as may be specified by regulations". The meaning of "value of transaction" is in the Explanation to Section 5 (clause (d) of the substituted Explanation) and the substantial business operations test is dealt with in the Commission's Combinations Regulations, 2024, which our overview of those regulations summarises. A short post on this topic is Deal value threshold for CCI notification.
New clause (e): the small target
The 2023 Act inserts: "(e) notwithstanding anything contained in clause (a) or clause (b) or clause (c), where either the value of assets or turnover of the enterprise being acquired, taken control of, merged or amalgamated in India is not more than such value as may be prescribed, such acquisition, control, merger or amalgamation, shall not constitute a combination under section 5."
The value is "as may be prescribed", which means prescribed by rules under the Act (Section 2(n)). No such rule is in the sources consulted, so we state no figure. Note also that the opening words refer to clauses (a), (b) and (c) only; clause (d) is not named in the printed text of clause (e), and we do not read anything further into that.
What the 2023 Amendment Act changed in Section 5 (thresholds)
| Provision | Before | After |
|---|---|---|
| Clause (c)(ii)(B) end | Ends "India" (not closed) | Ends "India; or" |
| Clause (d) | None | Transaction value exceeding rupees two thousand crore, with a substantial business operations proviso |
| Clause (e) | None | Target not more than the prescribed value is not a combination |
| Asset and turnover figures in clauses (a) to (c) | As in the table | Not changed by the 2023 Act |
| Explanation | Old Explanation | Substituted (see the Explanation article) |
Why due diligence matters here
Thresholds need accurate numbers: audited book values, group structure, and an understanding of the deal consideration. Our posts on mergers and acquisitions in India and on business due diligence in M&A explain how that evidence is collected. For the approval route itself, see the guide to CCI approval for mergers and acquisitions and the general guide on regulation of combinations under Sections 5 and 6. For tax questions around a deal, see our income-tax guides.
Need help testing a deal against Section 5?
Whether a deal is a combination depends on audited numbers, group relationships and the value of the consideration. Our team can test a proposed acquisition or merger against the wording above as part of financial and legal due diligence before you commit to a timetable.
Key takeaways
- A deal is a combination if it meets the asset or turnover limits at party level or group level in clause (a), (b) or (c).
- The figures are quoted only as printed; check the current notified values under Section 20(3).
- New clause (d): a transaction value above rupees two thousand crore, if the target has substantial business operations in India as specified by regulations.
- New clause (e): a target not above the prescribed value in India is not a combination.
- The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked.
Read next
- Control, group, turnover and value of assets explained
- Notice of combination to CCI and the standstill period
- Inquiry into combinations and factors considered
- Deal value threshold for CCI notification
Disclaimer: Based on the consolidated text of the Competition Act, 2002 published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023, and on the regulations and guidelines of the Commission as notified in 2024, as consulted on 2 October 2026. Commencement notifications, notified thresholds, rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.