Income Tax Act, 2025
Section 11: Ins. by Act 28 of 2016, s. 12 (w.e.f. 12017)
11. Ins. by Act 28 of 2016, s. 12 (w.e.f. 12017)
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(b) not sharing any know-how, patent, copyright, trade-mark, licence, franchise or any other
business or commercial right of similar nature or information or technique likely to assist in the
manufacture or processing of goods or provision for services:
Provided that sub-clause (a) shall not apply to—
(i) any sum, whether received or receivable, in cash or kind, on account of transfer of the
right to manufacture, produce or process any article or thing or right to carry on any
business 1[or profession], which is chargeable under the head “Capital gains”;
(ii) any sum received as compensation, from the multi-lateral fund of the Montreal
Protocol on Substances that Deplete the Ozone layer under the United Nations Environment
Programme, in accordance with the terms of agreement entered into with the Government of
India.
Explanation.—For the purposes of this clause,—
(i) “agreement” includes any arrangement or understanding or action in concert,—
(A) whether or not such arrangement, understanding or action is formal or in writing; or
(B) whether or not such arrangement, understanding or action is intended to be
enforceable by legal proceedings;
(ii) “service” means service of any description which is made available to potential users and
includes the provision of services in connection with business of any industrial or commercial
nature such as accounting, banking, communication, conveying of news or information,
advertising, entertainment, amusement, education, financing, insurance, chit funds, real estate,
construction, transport, storage, processing, supply of electrical or other energy, boarding and
lodging;]
2[(vi) any sum received under a Keyman insurance policy including the sum allocated by way of
bonus on such policy.
3[(via) the fair market value of inventory as on the date on which it is converted into, or treated
as, a capital asset determined in the prescribed manner;]
Explanation.—For the purposes of this clause, the expression “Keyman insurance policy” shall
have the meaning assigned to it in clause (10D) of section 10;]
4[(vii) any sum, whether received or receivable, in cash or kind, on account of any capital asset
(other than land or goodwill or financial instrument) being demolished, destroyed, discarded or
transferred, if the whole of the expenditure on such capital asset has been allowed as a deduction
under section 35AD.]
5* * * * *
Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as
to constitute a business, the business (hereinafter referred to as “speculation business”) shall be
deemed to be distinct and separate from any other business.
not sharing any know-how, patent, copyright, trade-mark, licence, franchise or any other
business or commercial right of similar nature or information or technique likely to assist in the
manufacture or processing of goods or provision for services:
Provided that sub-clause
shall not apply to—
any sum, whether received or receivable, in cash or kind, on account of transfer of the
right to manufacture, produce or process any article or thing or right to carry on any
business 1[or profession], which is chargeable under the head “Capital gains”;
any sum received as compensation, from the multi-lateral fund of the Montreal
Protocol on Substances that Deplete the Ozone layer under the United Nations Environment
Programme, in accordance with the terms of agreement entered into with the Government of
India.
Explanation.—For the purposes of this clause,—
“agreement” includes any arrangement or understanding or action in concert,—
whether or not such arrangement, understanding or action is formal or in writing; or
whether or not such arrangement, understanding or action is intended to be
enforceable by legal proceedings;
“service” means service of any description which is made available to potential users and
includes the provision of services in connection with business of any industrial or commercial
nature such as accounting, banking, communication, conveying of news or information,
advertising, entertainment, amusement, education, financing, insurance, chit funds, real estate,
construction, transport, storage, processing, supply of electrical or other energy, boarding and
lodging;]
2[
any sum received under a Keyman insurance policy including the sum allocated by way of
bonus on such policy.
3[
the fair market value of inventory as on the date on which it is converted into, or treated
as, a capital asset determined in the prescribed manner;]
Explanation.—For the purposes of this clause, the expression “Keyman insurance policy” shall
have the meaning assigned to it in clause
of section 10;]
4[
any sum, whether received or receivable, in cash or kind, on account of any capital asset
(other than land or goodwill or financial instrument) being demolished, destroyed, discarded or
transferred, if the whole of the expenditure on such capital asset has been allowed as a deduction
under section 35AD.]
5* * * * *
Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as
to constitute a business, the business (hereinafter referred to as “speculation business”) shall be
deemed to be distinct and separate from any other business.