Income Tax Act, 1961
Section 2: Ins. by Act 21 of 1998, s. 12 (w.e.f. 11999).
2. Ins. by Act 21 of 1998, s. 12 (w.e.f. 11999).
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1[(6) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers
the rights to the amalgamated company (being an Indian company),—
(i) the provisions of sub-sections (3) and (4) shall not apply in the case of the amalgamating
company; and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as
they would have applied to the amalgamating company if the latter had not so sold or otherwise
transferred the rights.]
2[(7) Where in a scheme of demerger, the demerged company sells or otherwise transfers the rights to
the resulting company (being an Indian company),—
(i) the provisions of sub-sections (3) and (4) shall not apply in the case of the demerged
company; and
(ii) the provisions of this section shall, as far as may be, apply to the resulting company as they
would have applied to the demerged company, if the latter had not sold or otherwise transferred the
rights.]
3[35AB. Expenditure on know-how.—(1) Subject to the provisions of sub-section (2), where the
assessee has paid 4[in any previous year relevant to the assessment year commencing on or before the
1st day of April, 1998] any lump sum consideration for acquiring any know-how for use for the purposes
of his business, one-sixth of the amount so paid shall be deducted in computing the profits and gains of
the business for that previous year, and the balance amount shall be deducted in equal instalments for
each of the five immediately succeeding previous years.
(2) Where the know-how referred to in sub-section (1) is developed in a laboratory, university or
institution referred to in sub-section (2B) of section 32A, one-third of the said lump sum consideration
paid in the previous year by the assessee shall be deducted in computing the profits and gains of the
business for that year, and the balance amount shall be deducted in equal instalments for each of the two
immediately succeeding previous years.
5[(3) Where there is a transfer of an undertaking under a scheme of amalgamation or demerger and
the amalgamating or the demerged company is entitled to a deduction under this section, then, the
amalgamated company or the resulting company, as the case may be, shall be entitled to claim deduction
under this section in respect of such undertaking to the same extent and in respect of the residual period as
it would have been allowable to the amalgamating company or the demerged company, as the case may
be, had such amalgamation or demerger not taken place.]
Explanation.—For the purposes of this section, “know-how” means any industrial information or
technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil well
or other sources of mineral deposits (including the searching for, discovery or testing of deposits or the
winning of access thereto).]
6[35ABA. Expenditure for obtaining right to use spectrum for telecommunication services.—(1)
In respect of any expenditure, being in the nature of capital expenditure, incurred for acquiring any right
to use spectrum for telecommunication services either before the commencement of the business or
thereafter at any time during any previous year and for which payment has actually been made to obtain a
right to use spectrum, there shall, subject to and in accordance with the provisions of this section, be
Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers
the rights to the amalgamated company (being an Indian company),—
the provisions of sub-sections
and
shall not apply in the case of the amalgamating
company; and
the provisions of this section shall, as far as may be, apply to the amalgamated company as
they would have applied to the amalgamating company if the latter had not so sold or otherwise
transferred the rights.]
2[
Where in a scheme of demerger, the demerged company sells or otherwise transfers the rights to
the resulting company (being an Indian company),—
the provisions of sub-sections
and
shall not apply in the case of the demerged
company; and
the provisions of this section shall, as far as may be, apply to the resulting company as they
would have applied to the demerged company, if the latter had not sold or otherwise transferred the
rights.]
3[35AB. Expenditure on know-how.—
Subject to the provisions of sub-section
Where the know-how referred to in sub-section
is developed in a laboratory, university or
institution referred to in sub-section
of section 32A, one-third of the said lump sum consideration
paid in the previous year by the assessee shall be deducted in computing the profits and gains of the
business for that year, and the balance amount shall be deducted in equal instalments for each of the two
immediately succeeding previous years.
5[
Where there is a transfer of an undertaking under a scheme of amalgamation or demerger and
the amalgamating or the demerged company is entitled to a deduction under this section, then, the
amalgamated company or the resulting company, as the case may be, shall be entitled to claim deduction
under this section in respect of such undertaking to the same extent and in respect of the residual period as
it would have been allowable to the amalgamating company or the demerged company, as the case may
be, had such amalgamation or demerger not taken place.]
Explanation.—For the purposes of this section, “know-how” means any industrial information or
technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil well
or other sources of mineral deposits (including the searching for, discovery or testing of deposits or the
winning of access thereto).]
6[35ABA. Expenditure for obtaining right to use spectrum for telecommunication services.—
In respect of any expenditure, being in the nature of capital expenditure, incurred for acquiring any right
to use spectrum for telecommunication services either before the commencement of the business or
thereafter at any time during any previous year and for which payment has actually been made to obtain a
right to use spectrum, there shall, subject to and in accordance with the provisions of this section, be