India Budget Series


Territory of India is not limited to land and sea but it includes air as well. There is a levy of Spectrum fee for auction of air waves. There are uncertainties in tax treatments in relation to payments in respect of Spectrum.

In order to provide clarity and avoid any future litigation and controversy, it is proposed to insert a new Section 35ABA in the Act to provide for tax treatment of spectrum fee.

The proposed new Section 35ABA shall function on same lining as that of Section 35ABB which is in relation to “license to operate telecommunication business”, in respect of:-

-Deduction of capital expenditure

-Taxability at the time of transfer of spectrum

-Taxability of excess amount and ineligible expenses at the time of transfer

– A scheme of amalgamation

These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent years.

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