rule 8D

Analysis of Section 14A read with Rule 8D

Income Tax - Section 14A of the Income Tax Act, 1961 (‘the Act’) provides that no deduction shall be allowed of any expenditure incurred in relation to income not includible in total income i.e. expenditure related to exempt income is not tax deductible....

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Whether section 14A disallowance is related to Income Earning

Income Tax - Whether disallowance under section 14A of the income tax act, 1961 is related with earning of actual income or notional/anticipated income? Most of taxpayers under Income tax act, 1961 afraid to file appeal against additions made by assessing officers due to fear of departmental procedures/penalty/bar/attachment in  the thought process o...

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Section 14A of Income Tax r.w. Rule 8D – Supreme Court upheld no income tax in absence of exempt income

Income Tax - Section 14A of Income Tax Act, 1961 r.w. Rule 8D of Income Tax Rules: Supreme Court standpoint – No tax in the absence of any exempt income The much debated and extensively litigated issue has been resolved by the Supreme Court in 2018 & 2019. The article below summarises issues encountered by the assessee’s prior […]...

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Analysis on Disallowance under Section 14A of Income Tax Act

Income Tax - The very intent of the section 14A of the income tax Act is that no expenditure shall be allowed as deduction, in computing the Total income of the Assessee, if such expenditure is incurred to earn an income, which is exempt under Income tax act. That is to say that no deduction shall be allowed in respect of the expenditure incurred in r...

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Evolution of Section 14A & Rule 8D of Income Tax

Income Tax - Section 14A of the Income-tax Act read with Rule 8D of Income-tax Rules which provide for disallowance of expenditure incurred in relation to income which does not form part of the total income, had been subject matter of a number of controversies. Various High Courts and Benches of the Income-tax Appellate Tribunal have on numerous [&hel...

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Stop Mechanical disallowance of expenditure u/s 14A r.w. Rule 8D: ICAI

Income Tax - The mechanical disallowance u/s 14A r.w. Rule 8D is also being added to the book profit by the AO irrespective of the fact whether assessee has actually debited any such expenditure in its P&L Account which is against the pronouncements given by various Judicial authorities in the recent past....

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Bombay high court to hear petition challenging Constitutional validity of Rule 8D

Income Tax - As earlier intimated to you, Writ Petition bearing No. 50 of 2010 (Indian Exporters Grievances Forum & Other vs. CIT) challenging the constitutional validity of Rule 8D has been admitted on 12.1.2010 by Hon’ble Shri Justice Dr. D.Y. Chandrachud and Hon’ble Shri Justice J.P. Devadhar of the Bombay High Court. ...

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Insurance Companies- Section 14A disallowance unjustified

Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi) - Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi) The Tribunal has interpreted Section 44 read with the first schedule and concluded that applicability of Section 14A is excluded in relation to computation of income of an insurance company. We have examined the relevant provisions. Section 44 begins ...

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Section 14A disallowance not sustainable if proper satisfaction not recorded

Vinay Bhasin Vs. ACIT (ITAT Delhi) - Vinay Bhasin Vs ACIT (ITAT Delhi) Assessee made heavy investments for earning of exempt income and being a busy professional, he requires the management of such a portfolio by incurring expenses, diversion of man-power/staff for indulging in investment activities to various activities like visiting ...

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Section 14A disallowance cannot Exceed Exempt Income: ITAT Mumbai

S. Vinodkumar Diamonds, Pvt Ltd. Vs DCIT (ITAT Mumbai) - S. Vinodkumar Diamonds, Pvt Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether the disallowance u/s 14A can exceed the exempt income? ITAT states that during the year under consideration the assessee has earned exempt income of Rs. 1.62 lakhs only. The AO disallowed interest expense...

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Section 14A disallowance cannot exceed Actual Expense incurred for earning exempt income

India Infoline Finance Limited Vs ACIT (ITAT Mumbai) - The issue under consideration is whether the disallowance under 14A can be exceed the actual expenditure incurred in this regard?...

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Section 14A Disallowance cannot exceed Exempt Income

Century Real Estate Holdings Pvt. Ltd. Vs ACIT (ITAT Bangalore) - The window for disallowance is indicated in section 14A and is only to the extent of disallowing expenditure incurred by the assessee in relation to tax exempt income....

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CBDT Circular No. 5/2014 Dated: 11.02.2014

Circular No. 5/2014-Income Tax - (11/02/2014) - Circular No. 5/2014-Income Tax Central Board of Direct Taxes, in exercise of its powers under section 119 of the Act hereby clarifies that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even where taxpayer in a particular year has not earned any exempt income....

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Notification No. 45/2008-Income Tax Dated: March 24, 2008 on Section 14A

Notification No. 45/2008-Income Tax - (24/03/2008) - INCOME TAX NOTIFICATION NO-45/2008, DT: March 24, 2008 Method for determining amount of expenditure in relation to income not includible in total income. 8D(1) Where the Assessing Officer, having regard to the accounts of the assessee of a previous year, is not satisfied with-(a) the correctness of ...

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Recent Posts in "rule 8D"

Analysis of Section 14A read with Rule 8D

Section 14A of the Income Tax Act, 1961 (‘the Act’) provides that no deduction shall be allowed of any expenditure incurred in relation to income not includible in total income i.e. expenditure related to exempt income is not tax deductible....

Read More
Posted Under: Income Tax |

Insurance Companies- Section 14A disallowance unjustified

Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi)

Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi) The Tribunal has interpreted Section 44 read with the first schedule and concluded that applicability of Section 14A is excluded in relation to computation of income of an insurance company. We have examined the relevant provisions. Section 44 begins with a non-obstante clause and overrides...

Read More

Section 14A disallowance not sustainable if proper satisfaction not recorded

Vinay Bhasin Vs. ACIT (ITAT Delhi)

Vinay Bhasin Vs ACIT (ITAT Delhi) Assessee made heavy investments for earning of exempt income and being a busy professional, he requires the management of such a portfolio by incurring expenses, diversion of man-power/staff for indulging in investment activities to various activities like visiting banks, use of vehicle and telephone, use...

Read More

Whether section 14A disallowance is related to Income Earning

Whether disallowance under section 14A of the income tax act, 1961 is related with earning of actual income or notional/anticipated income? Most of taxpayers under Income tax act, 1961 afraid to file appeal against additions made by assessing officers due to fear of departmental procedures/penalty/bar/attachment in  the thought process o...

Read More
Posted Under: Income Tax |

Section 14A disallowance cannot Exceed Exempt Income: ITAT Mumbai

S. Vinodkumar Diamonds, Pvt Ltd. Vs DCIT (ITAT Mumbai)

S. Vinodkumar Diamonds, Pvt Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether the disallowance u/s 14A can exceed the exempt income? ITAT states that during the year under consideration the assessee has earned exempt income of Rs. 1.62 lakhs only. The AO disallowed interest expenses under Rule 8D(ii) of Rs. 30,13,853/-. ...

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Section 14A disallowance cannot exceed Actual Expense incurred for earning exempt income

India Infoline Finance Limited Vs ACIT (ITAT Mumbai)

The issue under consideration is whether the disallowance under 14A can be exceed the actual expenditure incurred in this regard?...

Read More

Section 14A of Income Tax r.w. Rule 8D – Supreme Court upheld no income tax in absence of exempt income

Section 14A of Income Tax Act, 1961 r.w. Rule 8D of Income Tax Rules: Supreme Court standpoint – No tax in the absence of any exempt income The much debated and extensively litigated issue has been resolved by the Supreme Court in 2018 & 2019. The article below summarises issues encountered by the assessee’s prior […]...

Read More
Posted Under: Income Tax |

Section 14A Disallowance cannot exceed Exempt Income

Century Real Estate Holdings Pvt. Ltd. Vs ACIT (ITAT Bangalore)

The window for disallowance is indicated in section 14A and is only to the extent of disallowing expenditure incurred by the assessee in relation to tax exempt income....

Read More

Analysis on Disallowance under Section 14A of Income Tax Act

The very intent of the section 14A of the income tax Act is that no expenditure shall be allowed as deduction, in computing the Total income of the Assessee, if such expenditure is incurred to earn an income, which is exempt under Income tax act. That is to say that no deduction shall be allowed in respect of the expenditure incurred in r...

Read More
Posted Under: Income Tax |

Consider Only Dividend bearing Securities for Section 14A disallowance R.W. Rule 8D(2)(iii)

PricewaterhouseCoopers Private Limited Vs ACIT (ITAT Kolkata)

In the light of judgment of Coordinate Bench of ITAT Kolkata in the case of REI Agro Ltd, we note that only dividend bearing securities should be considered for disallowance under rule 8D(2)(iii) of I.T. Rules....

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