Purchased goodwill can have statutory acquisition cost adjusted for depreciation previously allowed. Self-generated goodwill generally has nil cost.
Purchased goodwill can have statutory acquisition cost adjusted for depreciation previously allowed. Self-generated goodwill generally has nil cost. Neither qualifies for current depreciation under section 33.
Sale agreement allocation, prior depreciation and whether the transaction is itemised or a slump sale change the computation.
Trace purchase price and earlier depreciation; classify self-generated elements; allocate consideration; apply capital-gain or slump-sale rules.
Goodwill purchased for ₹20 lakh with ₹5 lakh historic depreciation and sold for ₹28 lakh uses an adjusted cost, while self-generated brand goodwill sold separately normally has nil statutory cost.
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.
For the complete rules on this topic, see the core guide: Goodwill Tax on Business Sale: Cost, Gain and No Depreciation.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Purchased goodwill can have statutory acquisition cost adjusted for depreciation previously allowed. Self-generated goodwill generally has nil cost. Neither qualifies for current depreciation under section 33.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
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