https://www.taxtmi.com/article/detailed?id=6903 Compensation paid for an undertaking not to compete is treated as attributable to a negative covenant and, where it impairs a source of income, constitutes a capital receipt. The court held that impairment of a discrete income source is sufficient for capital character even if other business activities continue. Subsequently, legislation was introduced making sums received under non compete or know how restraint agreements taxable as business income, subject to limited proviso exceptions for capital transfers and certain international environmental compensation. en-us Thu, 21 Jul 2016 10:06:09 +0530 Thu, 21 Jul 2016 10:06:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=6903 Compensation paid for an undertaking not to compete is treated as attributable to a negative covenant and, where it impairs a source of income, constitutes a capital receipt. The court held that impairment of a discrete income source is sufficient for capital character even if other business activities continue. Subsequently, legislation was introduced making sums received under non compete or know how restraint agreements taxable as business income, subject to limited proviso exceptions for capital transfers and certain international environmental compensation. Articles Income Tax Thu, 21 Jul 2016 10:06:09 +0530 https://www.taxtmi.com/article/detailed?id=6903