Sec 57 plz reply 2 dis

Are the deductions for the expenses paid for earning exempt income allowed under head income from other sources?
Replies (22)

 Nop Kanveer Singh..Sec 14A says that expenditure incurred in relation to income exempted from total income shall not be allowed as deduction in the computation of income under ANY 5 heads of income

Ya, section 14A specifies that any expenditure that is incurred in relation of any income claimed exempt shall not be allowed as deduction..
But in the book supplied by institue itself says that it will be allowed even if the income earned was exempt.. Case law-cit v. Rajindra prasad moody(page no-4.235 of taxation ipcc)

Kanveer......it says in respect of any exp that its not necessary that income should in fact have been earned as result of the exp....

Here the interest on money borrowed was allowed as it did not yield any taxable divident..these are the facts of the case..right

 This means that even if we dont earn an income with respect to an investment we can still claim it as ded in sec 57..the fact that there was no income to deduct the exp is not a valid claim..I hope u get the point

i mean u can claim the interest on the borrowed funds for such investment...like the fact in the case law

But that interest was paid for earning the exempt income..

But the facts of the case law says taxable dividend......may be it was an investment in any shares of which the dividend was taxable

Ok..As you are saying the dividend which was earned was not taxable but the deduction was allowed.. So if there is no other income of assesse under head capital gain then can he set off this with incomes from other heads?

 I dint get u kanveer..section 57 talks about other sources and not capital gains..

are u asking what happens if there is no other income for the assesse in the head of other sources and whether he can set off it with other heads??

Yeah..sorry i wrote capital gain instead of i.F.O.S

 its ok friend..Income from OS can be set off against other sources..i mean if its a -ve anw as u askd...But it cant be carried forward...

K thanks

My pleasure dude...just finished studyin this and wrote the exam..so i guess its true..and tanx 4 the case law too..never touched ma study material other than for serv tax and VAT..lolz

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