Goodwill is not depreciable under section 33 of the Income-tax Act, 2025.
Goodwill is not depreciable under section 33 of the Income-tax Act, 2025. On transfer, purchased goodwill uses the legally adjusted purchase cost, while self-generated goodwill generally has nil statutory cost unless a specific rule applies.
A business sale can transfer goodwill separately, through itemised assets, or within a slump sale. Character, consideration allocation, prior depreciation allowed before the law change and connected-party valuation all affect the taxable gain.
Identify purchased or self-generated goodwill; trace original cost and prior depreciation; review sale agreement allocation; test fair value and slump-sale rules; compute capital gain and TDS/GST implications separately.
Purchased goodwill cost ₹30 lakh and ₹6 lakh depreciation had been allowed before goodwill became non-depreciable. If sold separately for ₹40 lakh, the adjusted statutory cost—not ₹30 lakh automatically—is used in the gain calculation.
The example is an illustration, not a substitute for the taxpayer's facts. A change in status, period, payment mode, document, city, asset, relationship or scheme can change the result.
Search pages often state a rate or limit without identifying the governing base. The calculation must distinguish gross receipt from taxable profit, tax from TDS, a deduction from an exemption, salary from business income, and an accounting entry from the tax treatment.
| Decision point | Required treatment |
|---|---|
| Legal year | Use the Act, rules and notification effective for the income or transaction period |
| Taxpayer category | Confirm residence, age, entity, employee/business status and regime |
| Calculation base | Use the statutory definition rather than CTC, net bank receipt or accounting label |
| Ceiling or rate | Apply actual-amount, percentage, shared, lifetime and gross-income limits in sequence |
| Documentation | Link every input to an invoice, statement, contract, certificate or official record |
| Final output | Show tax, surcharge, cess, interest and TDS/TCS credits separately |
This page is written around the entities and concepts search engines expect for the topic: goodwill, slump sale, section 77, fair market value, net worth. They are used only where relevant and are connected to the live calculator and knowledge hub rather than repeated mechanically.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Goodwill is not depreciable under section 33 of the Income-tax Act, 2025. On transfer, purchased goodwill uses the legally adjusted purchase cost, while self-generated goodwill generally has nil statutory cost unless a specific rule applies.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
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