Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live on the statute but spent. Part Q of Chapter XV. Relief confined to lump-sum know-how consideration received/receivable in the previous year relevant to an assessment year commencing on or before 1 April 2000.
Subject: Where a resident individual who has developed know-how took more than twelve months to develop it, the lump-sum consideration may, at his option, be taxed as if one-third fell in the year of receipt and one-third in each of the two immediately preceding years, with rectification of the two prior assessments under section 154; 'know-how' bears the section 35AB meaning. The relief is spent for assessment year 2000-01 and later.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. The know-how counterpart of section 180, now spent
Section 180A gave a resident individual who had developed know-how, the development of which took more than twelve months, a spreading relief analogous to that for authors under section 180. On the individual's election, the gross lump-sum consideration could be taxed as if one-third of it fell in the year of receipt and one-third in each of the two immediately preceding previous years, with the two earlier assessments rectified accordingly under section 154 (the four-year period for rectification being reckoned from the end of the financial year in which the receipt-year assessment was made). 'Know-how' took the meaning assigned in section 35AB. The relief is confined to lump sums received or receivable in the previous year relevant to an assessment year commencing on or before 1 April 2000, and is therefore spent.
2. No reported jurisprudence
Section 180A has generated no reported decision construing it; only statutory text and commentary exist. Being spent from assessment year 2000-01, it survives in the treatise as historical record. No authority is asserted (candour rule).
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
180A. Where the time taken by an individual, who is resident in India, for developing any know-how is more than twelve months, he may elect that the gross amount of any lump sum consideration received or receivable by him during the previous year relevant to the assessment year commencing on the 1st day of April, 2000 or earlier assessment years for allowing use of such know-how shall be treated for the purposes of charging income-tax for that year and for each of the two immediately preceding previous years as if one-third thereof were included in his income chargeable to tax for each of those years respectively and if he so elects, notwithstanding anything contained in any other provision of this Act,—
(a) such gross amount shall be so treated, and
(b) the assessments for each of the two preceding previous years shall, if made, be accordingly rectified under section 154, the period of four years specified in sub-section (7) of that section being reckoned from the end of the financial year in which the assessment relating to the previous year in which the amount was received or receivable by such individual is made.
Explanation.—For the purposes of this section, the expression "know-how" has the meaning assigned to it in section 35AB.
C. AUTHORITIES
Candour rule. Section 180A is a spent spreading-relief provision (inapplicable from AY 2000-01) with no reported case law. The statutory mechanics are summarised in the commentary and verbatim text.
Cluster A — No authority
No reported decision construes section 180A. The provision is spent from assessment year 2000-01 and is retained for historical completeness; no authority is invented.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XV — LIABILITY IN SPECIAL CASES
Section 180A — Consideration for Know-How
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live on the statute but spent. Part Q of Chapter XV. Relief confined to lump-sum know-how consideration received/receivable in the previous year relevant to an assessment year commencing on or before 1 April 2000.
Subject: Where a resident individual who has developed know-how took more than twelve months to develop it, the lump-sum consideration may, at his option, be taxed as if one-third fell in the year of receipt and one-third in each of the two immediately preceding years, with rectification of the two prior assessments under section 154; 'know-how' bears the section 35AB meaning. The relief is spent for assessment year 2000-01 and later.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. The know-how counterpart of section 180, now spent
Section 180A gave a resident individual who had developed know-how, the development of which took more than twelve months, a spreading relief analogous to that for authors under section 180. On the individual's election, the gross lump-sum consideration could be taxed as if one-third of it fell in the year of receipt and one-third in each of the two immediately preceding previous years, with the two earlier assessments rectified accordingly under section 154 (the four-year period for rectification being reckoned from the end of the financial year in which the receipt-year assessment was made). 'Know-how' took the meaning assigned in section 35AB. The relief is confined to lump sums received or receivable in the previous year relevant to an assessment year commencing on or before 1 April 2000, and is therefore spent.
2. No reported jurisprudence
Section 180A has generated no reported decision construing it; only statutory text and commentary exist. Being spent from assessment year 2000-01, it survives in the treatise as historical record. No authority is asserted (candour rule).
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
180A. Where the time taken by an individual, who is resident in India, for developing any know-how is more than twelve months, he may elect that the gross amount of any lump sum consideration received or receivable by him during the previous year relevant to the assessment year commencing on the 1st day of April, 2000 or earlier assessment years for allowing use of such know-how shall be treated for the purposes of charging income-tax for that year and for each of the two immediately preceding previous years as if one-third thereof were included in his income chargeable to tax for each of those years respectively and if he so elects, notwithstanding anything contained in any other provision of this Act,—
(a) such gross amount shall be so treated, and
(b) the assessments for each of the two preceding previous years shall, if made, be accordingly rectified under section 154, the period of four years specified in sub-section (7) of that section being reckoned from the end of the financial year in which the assessment relating to the previous year in which the amount was received or receivable by such individual is made.
Explanation.—For the purposes of this section, the expression "know-how" has the meaning assigned to it in section 35AB.
C. AUTHORITIES
Candour rule. Section 180A is a spent spreading-relief provision (inapplicable from AY 2000-01) with no reported case law. The statutory mechanics are summarised in the commentary and verbatim text.
Cluster A — No authority
No reported decision construes section 180A. The provision is spent from assessment year 2000-01 and is retained for historical completeness; no authority is invented.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.