Budget 2021: No Goodwill Depreciation – Impact On M&A

This change will need to be factored in the bid price for M&A presently underway and may end up increasing transaction costs.

(Image: pxhere)
(Image: pxhere)
Picture an India Inc. boardroom discussion, taking place pre Feb.1, 2021, on a $1 billion business buyout. The business buyout may create $500 million of intangible assets, including an approximate goodwill of $400 million.Will this goodwill be tax deductible? Yes, there is a legal basis for it to be so and, hence, it will give a potential benefit of approximately $100 million.
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