Section 14a rule 8d

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jagdish vala (Querist)
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23 January 2013 Whether disallowance U/s 14A Rule 8D needs to be made when dividend income earned by purchasing and selling mutual funds during the year and there is no investment on the Last day and first Day of the Previous year.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 January 2013 Rule 8D can not be applied as the Dividend Income earned by the assessee was incidental to the trading asset he held.
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The only disallowance which can be made in in such a case is direct expenditure incurred for receiving the dividends otherwise, by applying the Formula AXB/C or HALF% The result Zero shows that no expenditure has been incurred for earning exempt income.

jagdish vala

jagdish vala (Querist)
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24 January 2013 Thanks a lot Paras Sir......

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