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its Neha (Querist)
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12 December 2009 can copyright be amortised @ 90% or fully in the year of purchase if it has one year life? which section of IT act deals with the same?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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12 December 2009 In tax law, amortization refers to the cost recovery system for intangible property. Although the theory behind cost recovery deductions of amortization is to deduct(absorb) the original cost in a systematic manner during the useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time, many times a perfect match of income and deductions does not occur for policy reasons.

The facts given are not clear. It cannot be understood that useful life is only one year of a copyright. Because rights of copyrights remains in force till the life time of author plus 60 years after his death.

If you have taken a license of a copyright; the useful life of which now remains only for one year; then definitely you can charge it to profit and loss account.

To avoid litigation; you can sell the rights to a publisher at a nominal price.

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