A company purchased the shares of another company in AY 2004-05. Since then its earning Dividend from the shares purchased. It received divdend of Rs 800000 in AY 12-13. Will there be any disallowance under section 14 A and why??
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Sec 14 a queryy
Replies (3)
Any expenditure incurred against the dividend income would be disallowable for tax purposes.
But what if no expenditure is incurred, like in this case ... Then?
Then the same would be dedcuted while calculating the taxable income as it is wholly exempt from tax.
Suppose if your Net Proft as per P&L is say Rs 10lacs & the dividend income is 8 lacs, so while calculating the taxable profit deduct the dividend income add/deduct the other itmes as per P&L and tax would be accordingly on the profit so arrived.
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