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tax on goodwill amount


I am 70 years old, and own a flat in Chennai. Recently the owners of our flat decided to go in for a joint development of our property with a contractor. Each flat owner now receives a lumpsum as goodwill money from the contractor. Please let me know whether this goodwill money is taxable in any way. If so, how to avoid or minimise the same? Appreciate your valuable advices. Thanks.

 
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Lawyer in Hyderabad.wats app no.9989324294

 

In an opinion,

A self-generated goodwill is not taxable, it is exempt...

 

 

Reason is very simple, as tax is always on "gain/loss" on sale and not on the asset itself...

 

In self-generated goodwill, there's no cost, so question of gain/loss doesn't arise,so it is exempted...



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PRACTICING LAWYER

goodwill is received for transfer of development rights.... it is taxable and subject to capital gains at full value.

As per SEc 55(2) (a)(ii) cost of acquisition of self generated goodwill is considred as nil for calculation of capital gains and therefoer full value is taxable.

tax can be avoided u/s 54F.

 

alok bhagat

 
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PRACTICING LAWYER

this is my view... corrections if any will increase my knowledge.... plz suggest...


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