Quick Summary
1. From the assessment year 2021-2022, goodwill of a business or profession is not considered as a depreciable asset and there would not be any depreciation on goodwill of a business or profession in any situation. In case where goodwill is purchased by an assessee, the purchase price of the goodwill will continue to be considered as cost of acquisition for the purpose of computation of capital gains under section 48 of the Act subject to the condition that in case depreciation was obtained by t
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1 Year PLAN
1999
(Excl. of GST ₹359)
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3499
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999
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FAQ :
No, from the assessment year 2021-2022 onwards, goodwill of a business or profession is not considered a depreciable asset, and no depreciation can be claimed on it.
If goodwill is purchased, its purchase price is considered the cost of acquisition for calculating capital gains under section 48. However, any depreciation claimed on goodwill before assessment year 2021-22 will be deducted from this purchase price.
It is now clarified that for the purposes of section 50 of the Act, reducing the amount of goodwill from a block of assets will be deemed a 'transfer'.
This amendment takes effect retrospectively from 1st April 2021 and applies to the assessment year 2021-22 and subsequent assessment years.
Previously, goodwill was considered a depreciable asset, and depreciation could be claimed on it.
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