Disallowance under section 14a
This query is : Resolved
24 January 2013
If amount is invested in investment from which exempt income will be genereated, on 1st Day of January, then for calculation of disallowance of interest expense, whether i should consider interest expense for whole year or interest expense incurred only after 1st Day of January i.e. only for 3 months
CA PARAS BAFNA
(Expert)
24 January 2013
If ITO invokes Rule 8D-
whole years interest is also considered under the computational framework.
.
If you want to remain safe, earmark the borrowed money, which has exclusively been utilised for such investment and do not claim that part of interest as an expense.
.
Suppose you have invested Rs 5.00 lacs in January 2013, but borrowed that interest bearing fund in Nov 12. Exclude the entire interest from Nov 12 to March 13.
.
whole years interest is also considered under the computational framework.
.
If you want to remain safe, earmark the borrowed money, which has exclusively been utilised for such investment and do not claim that part of interest as an expense.
.
Suppose you have invested Rs 5.00 lacs in January 2013, but borrowed that interest bearing fund in Nov 12. Exclude the entire interest from Nov 12 to March 13.
.
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