Disallowance of expenditure related to exempted income

This query is : Resolved

Thejaswini HD (Querist)
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19 November 2014 We are claiming dividend and interest as deduction u/s 80 P(2)d) of a co-operative society.
My query is whether the expenditure incurred to earn this income is subject to disallowance as per Rule 8D

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 November 2014 Yes the expenditure incurred to earn this income is subject to dis-allowance as per Rule 8D.

Thejaswini HD

Thejaswini HD (Querist)
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19 November 2014 but we are showing it as deduction.. we are not saying it is exempted.. this is where am little confused... please help

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 November 2014 Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction.

Thejaswini HD

Thejaswini HD (Querist)
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19 November 2014 so either way expenditure will be disallowed....thank you so much sir

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