Convertion of company from sole propretary concern

Please suggested the Tax treatemnt of goodwill on transfer of all the asset from the sole propriatory concern  to the Company with claiming the exmention of Sec 47 ie Sole proprietory concern is converted into private limited company by sastisfying all the conditions specified under Sec 47(XIII) of the income tax act 1961 ,but the company have paid to the owner of the firm in excess of the book value takenover resulting into goodwill,Wether depreciation on this goodwill be allowed under sec 32 of the income tax Act 1961.

 

 

Thanks & Regards

Sagar Oberai

Tel-09819861516..........

Replies (1)

Dear sagar,

Goodwill will have to be written off against any reserve of the company or iany futre reserve not more than 5 consecutive FYs.

 

During take over of a Sole Proprietorship, do we have insert a takeover clause in the MOA?

 

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