Sec 10(34A) - Income on account of buyback of unlisted shares - Is it completely tax exempt?

Rish s , Last updated: 23 April 2022  
  Share


Incomes which do not form part of total income

Sec 10(34A) 

"Any income arising to an assessee, being a shareholder, on account of buyback of shares (not being listed on a recognized stock exchange) by the company as referred to in section 115QA"

Is this income completely Tax exempt?

Section 14A (Expenditure incurred in relation to income not includible in total income) and amended Rule 8D may be read alongside to check if any tax liability can come in this regard.

Sec 10(34A) - Income on account of buyback of unlisted shares - Is it completely tax exempt

However, it may be noted that the disallowance cannot exceed aggregate total expenses claimed by the assessee in the financial year.

Some expenditures related to earning such exempt income shall be dis-allowed.

14A(2)

"The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act".

 

14A(3)

"The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act".

 

Rule 8D(2)

"The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts, namely:

(i) the amount of expenditure directly relating to income that does not form part of total income; and

(ii) an amount equal to one percent of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income:

Provided that the amount referred to in clause (i) and clause (ii) shall not exceed the total expenditure claimed by the assessee."


CCI Pro

Published by

Rish s
(CA)
Category Income Tax   Report

  16557 Views

Comments


Related Articles


Loading


Popular Articles





CCI Pro
Meet our CAclubindia PRO Members

Follow us
add to google news

CCI Articles

submit article


Company
Featured 14 March 2026
Associate CA

N N V Satish&co

Hyderabad

CA

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 12 March 2026
Customer Relationship Executive

TAXLET

Calicut

B.Com

View Details
Company
Featured 14 March 2026
Article Trainee

N N V Satish&co

Hyderabad

CA Inter

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details