Income Tax Act Section 35ABA: Rules for Amortizing Telecom Spectrum Expenditure and Tax Implications on Transfers and Mergers.
Section 35ABA of the Income Tax Act addresses the amortization of capital expenditure for acquiring rights to use spectrum for telecommunication services. The deduction for such expenditure is calculated based on the period from the commencement of business to the expiration of the license. If the spectrum is sold, the tax treatment varies depending on whether the sale consideration is less or more than the written down value (WDV). The section outlines specific tax treatments for entire or partial transfers, amalgamations, and de-mergers. Non-compliance with Section 35ABA provisions allows the Assessing Officer to re-compute income and rectify errors.
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