(a) When technical know-how is acquired in any previous year the lump-sum consideration paid shall be allowed to be deducted in six equal instalments commencing from the previous year in which such consideration is paid.
(b) In case technical know-how acquired was developed in any Indian laboratory, university or institution referred under section 32A, the consideration paid shall be written off in three equal instalments.
Note. Any instalment of such expenditure incurred before 1-4-1998 shall not be left for claiming as deduction during the previous year 2000-01 onwards and hence section 35A is not applicable w.e.f. previous year 2000-01.
Any expenditure incurred on acquiring know-how shall qualify for depreciation @ 25% with effect from 1-4-1998.