Taxability of non compete fees

[pankaj jhawar]

How the non compete fees is taxable? wheher the same can be amortised. What are the relevant case law and section for the same.

[Rama Krishana]

Non-compete fee may be treated as capital receipt. But the situation and terms of the contract may determine the nature of income actually. You may refer decision of high court as cited : 2008 TMI - 30972 - MADHYA PRADESH HIGH COURT.

AI Summary

Non-compete fees: may be treated as capital receipts, but tax character depends on contract terms. A non-compete fee may be treated as a capital receipt, but its tax character depends on the specific terms and factual matrix of the contract; whether it is revenue or capital in nature-and therefore whether amortisation is permissible-must be determined from the contractual arrangement. The contributor cites a High Court decision for further reference.