Amendment of section 55.
33. In section 55 of the Income-tax Act, with effect from the 1st day of April, 2017,-
(i) in sub-section (1), in clause (b), in sub-clause (1), after the words “any business”, the words “or profession” shall be inserted;
(ii) in sub-section (2), in clause (a), after the words “any business”, the words “or profession” shall be inserted.
Notes on Clauses:
Clause 33 of the Bill seeks to amend section 55 of the Incometax relating to meaning of “adjusted”, “cost of improvement” and “cost of acquisition”.
Sub-clause (1) of clause (b) of sub-section (1) of the aforesaid section provides that the cost of improvement in relation to a capital asset, being goodwill of a business or a right to manufacture, produce or process any article or thing or right to carry on any business, shall be taken to be nil.
Further, clause (a) of sub-section (2) of the aforesaid section provides that the cost of acquisition in relation to a capital asset, being goodwill of a business or a trademark or brand name associated with a business or a right to manufacture, produce or process any article or thing or right to carry on any business, tenancy rights, state carriage permits or loom hours, shall be taken to be the amount of the purchase price in case the asset is purchased by the assessee, and in any other case such cost shall be taken to be nil.
It is proposed to amend the said sub-clause (1) of clause (b) of sub-section (1) and clause (a) of sub-section (2) of the said section so as to include the right to carry on the profession also under its scope.
These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017- 2018 and subsequent years.
