section 14 a

Girish Kapoor (Accountant & MBA student) (50 Points)

18 September 2009

Hi,

I want to know how to make calculation u/s 14A .when

1) there is no direct expenses attributable to dividend

2) no loan has been taken for investment

Thanks & Regards,

Girish Kapoor

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4 Replies

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 18 September 2009

The department has come of with a notification and has inserted rule 8D and the calcuation of the same is as below:


Working of Section 14A as per rule 8D for y. e.

1	Directly attributable					-


2	Interest which cannot be			X	Average Value of Stock
	directly attributable			---------------------------------------
				Average Total Assets

	-		-	-	-	-
			-	-	-

3	0.5% of average value of Stock related to tax free
					-	-

		Disallowance u/s 14A on shares held as stock in trade					-

Girish Kapoor (Accountant & MBA student) (50 Points)
Replied 19 September 2009

Originally posted by :Aditya Maheshwari
"	The department has come of with a notification and has inserted rule 8D and the calcuation of the same is as below: iT MEANS I HAVE TO CALCULATE AVERAGE VALUE OF STOCK. AND 0.5 OF THIS IS THE DISALLOWANCE AMOUNT. M I CORRECT?? Working of Section 14A as per rule 8D for y. e. 1 Directly attributable - 2 Interest which cannot be X Average Value of Stock directly attributable --------------------------------------- Average Total Assets - - - - - - - - 3 0.5% of average value of Stock related to tax free - - Disallowance u/s 14A on shares held as stock in trade -	"