Treatment under rule 8D of Income Tax

[Asked by Guest]

Dear Sir,

Please suggest me wrt to the following issues:

1. A unlisted public company becomes a partner in LLP and having profit sharing ration is more than 50%, 

As profit of LLP is taxable in the hand of LLP and not in the hand of partners so in the case if a unlisted public company is partner, WHAT WOULD BE TREATMENT OF EXEMPTED PROFIT RECEIVED BY SUCH COMPANY AS PER RULE 8D OF INCOME TAX?

[tarsem gupta]

The income from share from firm is exempt from tax u/s 10(2A). Under section 14A read with rule 8D any expenditure incurred on the exempted income is not allowable as deduction from the Income of the assessee.

AI Summary

Exempt income from firm partners: expenditure attributable disallowed under section 14A read with rule 8D.
Income distributed as a partner's share from a firm is exempt under the cited exemption provision, but any expenditure incurred in relation to such exempt income is not allowable as a deduction; disallowance of such expenditures is governed by the rule addressing expenditures relatable to exempt income.