23 September 2016
Section 14A says that no expenditure would be allowed as a business expenditure if the same has been expended/spent to earn an income which is not chargeable to tax as per the provisions of Indian Income Tax Act, 1961(exempt income). Rule 8D specifies the method for calculating such exempt expenditure. This section has been subject to numerous litigations and is a bone of contention between taxpayers and department.
CAclubindia
