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Section 14a of income tax, act, 1961

Bharat Patel ( COMPANY SECRETARY) (32 Points)

09 December 2011

Dear all i wante to know section 14A of Incoe tax act pls guide me on this matter pls

Thanking you,

Regards,

Bharat Patel

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6 Replies

CA Chirag Haraniya (Chartered Accountant) (902 Points)
Replied 09 December 2011

For the purpose computation of total income under Ch. IV ( All five heads of Income) , as per sec. 14A "No deduction is allowed for expenditure incurred in respect of exempt income against taxable income "

& If assessee claims that no expenditure is incurred and at the same time if AO is not satisfied with correctness of claim then AO may calcuate amount of disallowance as per Rule 8D

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CA Hardik Bunha (self) (2121 Points)
Replied 10 December 2011

If assessing officer not satisfied with books of a/c then he will compute proposnate basis. u/s 14a NO DEDUCTION OF EXP. IN RELATION TO EXEMPT INCOME.

(Guest)

Sec 14A-Deductibility of expenditure incurred in relation to income not includible in total income

i)As per Sec14A expenditure in relation to exempt income in not allowed as a deduction while computing income under any of five heads of income .

ii)The Assessing officer is empowered to determine the amount of expenditure incurred in relation to such income which doesn't part of total income in accordance with such method as may be prescribed by CBDT in this regard.

iii)Such method should be adopted by Assesseing officer if he is not satisfied with the correctness if the cliam of the assessee. ,having record to the accounts of the assessee.

CA Shraddha (Mcom, CS Exe.) (Service) (224 Points)
Replied 10 December 2011

For determining the amount of disallowance as per method prescribed in rule 8D you can refer the attached sheet.

Attached File : 632056 883170 sec 14a formula.xlsx downloaded: 1274 times

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CA Maulik Rachh (-) (114 Points)
Replied 13 December 2011

In short section 14A is regarding to caculation of allowable exps incurred in relation to the excempt income

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Ankita (JOB) (29 Points)
Replied 23 December 2011

if assessee has not claimed any expenditure while computing the total income. Hence section 14A is not applicable. Hence rule 8D is also not applicable.