Capital gain on self-generated goodwill is:
AAlways exempt
BTaxable with cost = nil
CAbove Rs. 50 lakhs
DOnly STCG
Answer & Solution
Correct answer: B. Taxable with cost = nil
1. Self-generated assets like goodwill were earlier held non-taxable (BC Srinivasa Setty SC).
2. Section 55(2)(a) now deems cost as NIL.
3. Entire sale consideration becomes capital gain. From AY 2021-22: no depreciation on goodwill.
_Source: ICAI BoS CA Final Paper 7, Ch 4 "Capital Gains"_
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