Sec. 14A

If the assessing officer is satisfied that there is non compliance of 14A He can make three adjustments 1. Adding back the expenditure relating to exempt income 2.If there is interest which is not directly attributable to any particular income or receipt of amount computed in accordance with following formula AÃ?B/C A=amout used for both taxable and exempt activities B=the average value of the tax free investment C= average of the total assets 3. 0.5 % of average tax free investments Sir/ madam. I understood the 1st point but i can't clearly understand the 2nd and 3rd points. Please explain me sir

Balamurugan Venkateswaran

Balamurugan Venkateswaran

CA Inter


25-Feb-21 18:46


Answers (2)

Best Answer

2 - It is like dividing the expense related to exempt income and non exempt income. 3. 0.5% is a blanket disallowance formula.

Suraj Lakhotia

Suraj Lakhotia


26-Feb-21 16:10