Section 28(va) of the Income Tax Act
Income-tax Act, 2025: s.26
Section 28(va) falls under section 28 of the Income-tax Act, 1961, which corresponds to section 26 (Income under head “Profits and gains of business or profession") of the Income-tax Act, 2025.
Read section 26 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 28(va) is Ltd. v. CIT (79 ITR 589), cited in 37 of the 101 judgments on BharatTax that turn on this section.
Leading authorities on Section 28(va)
This case is authority for the principle that deductions under section 36(1)(viii) of the Income-tax Act may be granted in respect of certain categories of receipts. The court's decision in this case is relied upon when interpreting the scope of business activities for tax purposes.
A non-compete fee paid as part of an agreement to prevent competition or induce employees to stay is to be treated as a revenue expenditure.
Expenditure incurred for acquiring a non-compete right is capital in nature and is entitled to depreciation under Section 32(1)(ii) of the Income-tax Act.
