Depreciation Rate of Goodwill As Per Income Tax Act



What is the depreciation rate of goodwill as per Income tax Act. Please give reason for your answer.

Khushboo Karamchandani

Khushboo Karamchandani! We charge 25% depreciation on goodwill as per income tax law. Like this, we can also charge 25% depreciation on other intangible assets. You can ask the reason of this to finance department of Govt. of India under Right of information.

Vinod Kumar

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Prof. Vinod Kumar is an Indian Educator, Motivational Speaker, Naturopathic Practitioner and Entrepreneur . He is the founder of Svtuition... read more »

3 comments:

  1. Khushboo KaramchandaniFebruary 23, 2012 at 2:16 AM

    Thank you so much sir......
    What I meant to ask was , since there are alot of controversies about the rate of depreciation charged on goodwill can we justify the rate of 25 % and take goodwill as a part of intangible assets ?
    Many people are of the opion that goodwill is not a part of intangible asset since nothing is mentioned in the depreciation schedule as per Income tax Act.

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  2. I do agree there exists conroversy and the matter has to be resolved by the the Supreme Court for the time being the decision of the Delhi High Court in the case of CIT V HINDUSTAN COCA COLA (ITA NO 1391 OF 2010) and also the decision of the Bombay ITAT decision Kotak Forex Brokerage Ltd (ITa 2692/mUM/2007) support the case for entitlement to depreciation on goodwill

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  3. As per the recent Supreme Court verdict in the case of Smifs Capital delivered in August 2012, depreciation is allowable on Goodwill, acquired during acquisition of a new company. Matter settled at last.

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