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A general doubt

kesha (...) (218 Points)

20 November 2012

Hello evryone.

Can someone please explain me sec 14 (a) .

thanks in advance

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3 Replies

Ankit (CA, CS) (3064 Points)
Replied 20 November 2012

of Income Tax Act?

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Ankit (CA, CS) (3064 Points)
Replied 20 November 2012

Hi Kesha,

I suppose you are talking about section 14a of the Income Tax Act.
section 14a is to be read with rule 8D and provides for the disallowance of expenses relating to the exempted incomes such as say dividend.

the disallowance is made on a proportionate basis i.e.
say your total income is Rs. 100 and the dividend earned is Rs. 20 i.e 20% of the income

and the total expenses is Rs 50. then they will assume that 20% of the total expenses i.e. Rs. 10 will be disallowed and will be assumed to be for earning dividend.