TaxTMI 
TaxTMI 
Amortization of spectrum fee for purchase of spectrum - (New) Section 52 / (Old) Section 35ABA
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.... Number of tax years over which deduction of expenditure is allowable in equal instalments A B C D 3. Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services (spectrum fee). Tax year in which,- (a) the business to operate telecom services is commenced; or (b) spectrum fee is actually paid, whichever is later. Number of years commencing from the initial tax year and ending in the tax year up to which the spectrum for which the fee is paid remains in force. Sub-section (2): Tax treatment on transfer, whether in whole or in part, of spectrum (a) Transfer at a LOSS • is transferred, and the proceeds of t....
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....sp;or years; (d) Transfer in amalgamation/demerger • is sold or otherwise transferred under the scheme of Amalgamation or Demerger, being an Indian company,- • (i) the provisions of clauses (a), (b), (c) and (d) of section 52(2) shall not apply to the amalgamating or demerged company; and • (ii) all the provisions of this section shall continue to apply to the amalgamated or resulting company as it would have applied to the amalgamating or demerged company, as if the transfer had not taken place. Sub-section (3): Partial transfer of spectrum • Where a part of spectrum is transferred in a tax year and sub-section (2)(b) and (c) does not apply, • t....
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....e has opted and been allowed by the Department of Telecommunications, Government of India to make full upfront payment of spectrum fee, • the actual payment of expenditure, irrespective of the tax year in which the liability for the expenditure was incurred, according to the method of accounting regularly employed by the assessee; or • (b) Deferred payment option • where an assessee has opted and been allowed by the Department of Telecommunications, Government of India to make deferred payment, • the amount which would have been payable by the assessee had he opted for full upfront payment of spectrum fee, irrespective of the tax year in which the liability for the expenditure was incurred....
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....tually paid before commencement of the business / No. of years from the previous year of commencement of business to the previous year in which license expires. 2. Spectrum fees paid after the commencement of business: Spectrum fee actually paid after the commencement of the business / No. of years from the previous year in which license fee actually paid to the previous year in which license expires. Where a deduction has been allowed under this section then no depreciation shall be allowed u/s 32(1) for the same or any other subsequent years Profit or Loss on sale of Telecommunication Spectrum: Allowed deduction under the Head "Profits or Gains of Business or profession" Different Situations ....