Amortization of spectrum fee for purchase of spectrum - Section 35ABA

Amortization of spectrum fee allows staged deduction over licence life and precludes depreciation for the same expenditure.

Amortization of capital expenditure for acquiring a right to use telecommunication spectrum allows deduction of an appropriate fraction of the spectrum fee over the remaining licence period; such deduction precludes depreciation for the same expenditure. On transfer, if sale consideration is less than WDV a deduction is allowed (immediate for full transfers or over the unexpired period for part transfers), while excess consideration over WDV is taxable as business income; alternatively the licence may attract capital gain treatment with indexation for long-term disposals. Noncompliance permits reassessment and rectification.