tax treatment under business / capital

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VIPIN KUTUMBALE (Querist)

25 January 2009 my brother was doing cable opertor business in a certain area/ network, generaly in the cable business, it is tradition right to do business in that area/ network along with the customers( subscribers ) sale to the party.

now the consideration Rs. 50,00,000/- received for sale of right to business in that area / net work . the amount received whethere capital gain or business income and how it will be taxed, 30% as General Business income or tax under capital gain at 10%/ 20%

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

25 January 2009 If right to do business in that area is permanent and he can transfer his rights in future as he likes then it becomes sale of business and capital gain will be attracted.

If the amount received is like a licence fee for certain number of years then it becomes a business income and to be treated as busines income.

VIPIN KUTUMBALE

VIPIN KUTUMBALE (Querist)

25 January 2009
Thanks for prom reply, as there is no licence fe etc. required for particular are , and also received amount for non compete agreeement in future with the acquirer or the net work

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