Intangible Assets refer to assets which do not appear in physical form ie,cannot be seen or touched

 

Intangible Assets may be

Self Generated

or

Acquired (Purchased from someone else)

 

 

What is COA (Cost of Acquisition) in case of tangible assets?

In case of Self generated  intangible assets

COA=Nil

 

In case intangible  Assets  acquired

COA=Purchase Price 

Option to take FMV as on 1/4/1981 not avaialable

(If asset acquired prior to 1/4/1981 FMV as on 1/4/1981 cannot be taken)

 

 

 

CAPITAL GAINS APPLICABLE ON WHICH TANGIBE ASSETS

This is applicable to following assets 

  1. Goodwill of a business or a
  2. trade mark or brand name associated with a business or a
  3. right to manufacture,produce or process any article or thing or
  4. right to carry on any business,
  5. tenancy rights,
  6. stage carriage permits or
  7. loom hours

 

Other Assets like Goodwill of Profession not covered here,hence no Capital gain on Sale of Goodwill of ProfessioN

 


 

What is Cost of Improvement in case of Intangible assets?

Cost of Improvement (COI) is 0 for

  1. Goodwill of a business or a
  2. Right to manufacture,produce or process any article or thing or
  3. Right to carry on any business,

 

  Capital Gain in case of Intangible Assets - Special Cases

 

  1. Income Tax
  2. Income from Capital Gains
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Davneet Singh
Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 7 years. He provides courses for Mathematics and Science from Class 6 to 12. You can learn personally from here https://www.teachoo.com/premium/maths-and-science-classes/.
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