Monday, August 3, 2009

Depreciation on intangible assets

Our company paid Rs.30 lakh to our competitor as non-compete fee as per the agreement. We want to claim depreciation on the amount paid by treating it as commercial asset though intangible. Is it possible?
Posted by at

1 comments:

  1. Section 2(11) defining the term ‘block of assets’ covers intangible assets also. Similarly, rule 5 of the Income-tax rules, 1962 prescribes the rate of depreciation for intangible assets. Expenditure incurred by you towards non-compete fee it is similar to other intangible assets such as know-how, patents, copyrights and trademarks, licences and franchisees. You are eligible to claim depreciation on the non-compete fee at 25%. You may refer to a recent decision in the case of ITO v. Medicorp Technologies India Ltd reported in 30 SOT 506.

    ReplyDelete

Subscribe to: Post Comments (Atom)