Expenses
disallowed when you earn Exempt Income Section 14A Income Tax Act
Section 14A
(1) No deduction of Expenditure
Incurred in relation to Income
Which does NOT form part of Total Income.
(2) If AO not satisfied with correctness of claim
Os Assessee in respect of
expenditure
In relation to income which does NOT form part of total income
SHALL Determine the amount of expenditure incurred in relation to such
income
As Prescribed. (Rule 8D).
(3) Provision of sub-section (2) applies
Even if Assessee claims that no
expenditure has been incurred.
Rule 8D
(2) The expenditure in relation to income which does
not form part of total income
Shall be Aggregate of the
following amounts:
|
Rule
|
Provision
|
Amount/calculation
|
Amount of
disallowance
|
|
|
Current Year
|
Previous Year
|
|||
|
8D(2)(i)
|
Amount of
Expenditure Directly relating to the income which does not form part of total
income.
|
-
|
-
|
xxx
|
|
8D(2)(ii)
|
Where
Assessee incurred interest expense which is not directly attributable to any
particular income or receipt the amount as follows:
|
-
|
-
|
-
|
|
A
|
Amount of
expenditure by way of interest other than interest included in (i)
|
xxx
|
-
|
-
|
|
Value A
|
xxx
|
-
|
||
|
B
|
Average value of investment, income
from which does not or shall not form
part of total income as appearing in balance sheet on first day & last
day of previous year
|
xxx
|
xxx
|
-
|
|
Average
value B
|
xxx
|
-
|
||
|
C
|
Average of Total Assets as appearing in the balance
sheet on first day & last day of previous year
|
xxx
|
xxx
|
-
|
|
Average
value C
|
xxx
|
-
|
||
|
Calculation under 8D(2)(ii)
|
(A*B)/C
|
xxx
|
||
|
8D(2)(iii)
|
Amount
equal to .5% of average investment ie(amount under 8D(2)(ii)B)
|
-
|
-
|
xxx
|
|
Total
Disallowance
|
-
|
-
|
xxxx
|
|
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