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CMA Final · Direct Tax Laws and International Taxation · Business Restructuring

Indian company A Ltd transfers its customer lists and trained workforce arrangements to its Singapore associated enterprise. For the definition of 'intangible property' in the Income-tax Act, 2025, how are these items treated?

Both items are intangible property. Customer lists fall under customer related intangible assets, and a trained and organised work force falls under human capital related intangible assets. The definition does not require registration or patent, so a transfer of them to an associated enterprise is covered.

  1. ACustomer lists are customer related intangibles, and a trained and organised work force is a human capital related intangibleCorrect
  2. BBoth are excluded because they lack physical form and legal registration
  3. CCustomer lists are included, but a trained work force is excluded as it is not an asset
  4. DBoth are included only if they are patented

Explanation

The definition lists customer lists under customer related intangible assets and a trained and organised work force under human capital related intangible assets. No patent or registration is needed. Hence the second and fourth options are wrong, and the third wrongly excludes the work force.

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