Section 14A
This query is : Resolved
09 December 2009
please guide on this section 14A read with rule 8D
09 December 2009
setion 14A provide that expenses on exempted income will not allowed the deduction in come tax act,
09 December 2009
Problem is arise that incase where assessee has both taxable income and exempted income,
normally he claim that he inccured on experses on expempted in come and or claime less exp. in case of exempted income
normally he claim that he inccured on experses on expempted in come and or claime less exp. in case of exempted income
09 December 2009
so to cover this matter Rule 8D come in force,
rule 8D provide the manner of calculation of expenses in case of exempted in come,
and this expense will not allowed as income
rule 8D provide the manner of calculation of expenses in case of exempted in come,
and this expense will not allowed as income
09 December 2009
Method is very simple,
1st take the avg of exempted assests and total assests,
Expeses will be
1. directly related to expempted income,
2. Proportionate exp. on the bases of avg (in case of commen exp)
3. 1/2% of avg of investment in exempted investment or assests
1st take the avg of exempted assests and total assests,
Expeses will be
1. directly related to expempted income,
2. Proportionate exp. on the bases of avg (in case of commen exp)
3. 1/2% of avg of investment in exempted investment or assests
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