Intangible Assets...........Depreciation available in Income Tax Law in India

Intangible Assets………Depreciation available in Income Tax Law in India

In the era of Globalisation, business has become more knowledge based; giving more importance to intellectual property rights. Section 32(1)(ii) of the Income Tax Act 1961, was introduced in financial budget of year 1998, providing that depreciation would also be allowed on intangible assets; acquired on or after 1^st April, 1998.

Definition of Intangible Assets includes followings:

--Marketing rights

--Contract Rights

--Brand Name

--Know-how Patents

--Copyrights

--Trademarks

--Licenses

--Franchise

--Non Compete payments

--Tenancy Rights

--Membership Rights

--or any other business or commercial rights of the similar nature.

Goodwill is a bundle of rights which include, inter alia, patents, trade marks, licenses franchises etc. and they assume importance in commercial world as they represent a particular benefit or advantages or reputation built by a person / company / business house over a period of time and customers associate themselves with such assets; hence depreciation would be allowable on the same.

Authored by :

CA Yogesh
Director
BWPM Co.

visit us at : www.Yogesh-CA.blogspot.com