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Section 14A

Anyone please give an example on section 14A


Satya  Shashank

Satya Shashank

CA Inter

13K+

13-Aug-20

63

Answers (5)

Sec 14A is for Expenditure incurred in relation to income not includible in total income. So expenses incurred for agricultural practices cannot be allowed if there is agricultural income


sudha reddy

sudha reddy

Moderator

13-Aug-20

Thread Starter

Satya Shashank

But I want an example on second point, precisely I want mathematical application

Rule 8D provides maximum disallowance under Sec14A = Direct expenditure related to exempt income + 1% of average investments (if income on investment is exempt) Loan taken for investments - interest on loan is direct exp 1 step - compute monthly averages of investment balances 2 step - compute annual average of 1st step 3 step - compute 1% of step 2 4 step - add 1% computed to direct exp see the example posted by Deepak Gupta


sudha reddy

sudha reddy

Moderator

14-Aug-20

Yep thanks


Thread Starter

Satya  Shashank

Satya Shashank

CA Inter

13K+

14-Aug-20

All the Best
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