Insertion of new Rule 8AC under Income Tax Rules, 1962
- Written Down Value (WDV) of block of assets will be as under :
Particulars
Amount
Opening WDV of block of assets
Less: Depreciation on block of assets
Add: Additions during the year (other than acquisition of goodwill of a business or profession)
Less: Sales during the year
XXX
(XXX)
XXX
(XXX)
(A)
XXX
Actual Cost of goodwill
Less: Actual Depreciation allowed on goodwill
Less: Depreciation allowable on goodwill as if goodwill was the only asset in the block
XXX
(XXX)
(XXX)
Adjusted cost of goodwill
(Maximum amount shall be up to the amount calculated in (A) above)
(B)
XXX
WDV
(A) - (B)
XXX
- Short Term Capital Gain (STCG) will be calculated as under:
Particulars
Amount
Adjusted Cost of goodwill
XXX
Less: WDV of block of assets as calculated in (A) above i.e. before adjustment of adjusted cost of goodwill
(XXX)
Less: Actual cost of “Intangible Assets” acquired during the year other than goodwill
(XXX)
Short Term Capital Gain
XXX
The Bare text read as under:
“8AC.
Computation of short term capital gains and written down value under section 50
where depreciation on goodwill has been obtained.
(1) For the purposes of proviso to
section 50, the written down value of the block of the asset and short term
capital gains, if any, for the previous year relevant to the assessment year
commencing on the 1st day of April, 2021 shall be determined in accordance with
this rule.
(2) Where the goodwill of the
business or profession was the only asset or one of the assets in the block of
asset “intangible” for which depreciation was obtained by the assessee in the
assessment year beginning on the 1st day of April, 2020, the written down value
of this block of asset for the previous year relevant to the assessment year
commencing on the 1st day of April, 2021 shall be determined in accordance with
the provisions of item (ii) of sub-clause (c) of clause (6) of section
43.
(3) Where the reduction under
sub-item (B) of item (ii) of sub-clause (c) of clause (6) of section 43, for
the previous year relevant to the assessment year commencing on the 1st day of
April, 2021, exceeds the aggregate of the following amounts, namely:-
(i)
the written down value of the block of assets at the beginning of the
previous year relevant to the assessment year commencing on the 1st day of
April, 2021 without giving effect to reduction under sub-item (B) of item (ii)
of sub-clause (c) of clause (6) of section 43; and
(ii)
the actual cost of any asset falling within the block of assets
“intangible”, other than goodwill, acquired during the previous year relevant
to the assessment year commencing on the 1st day of April, 2021,
such excess shall be deemed to be
the capital gains arising from the transfer of short-term capital assets.
(4) Without prejudice to the
provisions of sub-rule (3) and section 55, where the goodwill of the business
or profession was the only asset in the block of asset “intangible” for which
depreciation was obtained by the assessee in the assessment year beginning on
the 1st day of April, 2020, and the block of asset ceases to exist on account
of there being no further asset acquired during the previous year relevant to
the assessment year commencing on the 1st day of April, 2021 in that block,
there will not be any capital gains or loss on account of the block of asset
having ceased to exist.
(5) The capital gains or loss on
transfer of goodwill, during the previous years relevant to the assessment year
2021-22 or subsequent assessment years, shall be determined in accordance with
the provisions of section 48, section 49 and clause (a) of sub-section (2) of
section 55.”
 Rules, 2021){kind=link}
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