Exempt-income expenditure disallowance remains capped at exempt income, preventing further adjustment where voluntary disallowance already matches it.

Exempt-income expenditure disallowance remains capped at exempt income, preventing further adjustment where voluntary disallowance already matches it. https://www.taxtmi.com/highlights?id=104772 The Finance Act, 2022 amendment to section 14A applies prospectively from assessment year 2022-23 and does not govern assessment year 2018-19. Disallowance of expenditure relating to exempt income under section 14A read with rule 8D cannot exceed the exempt income earned during the relevant year. Where the taxpayer's voluntary disallowance already equalled the exempt income, no additional disallowance was warranted. The deletion of the further disallowance was sustained and the Revenue's appeal was dismissed. en-us Sat, 10 Oct 2026 08:32:32 +0530 Sat, 10 Oct 2026 08:32:34 +0530 TaxTMI RSS Generator Exempt-income expenditure disallowance remains capped at exempt income, preventing further adjustment where voluntary disallowance already matches it. https://www.taxtmi.com/highlights?id=104772 The Finance Act, 2022 amendment to section 14A applies prospectively from assessment year 2022-23 and does not govern assessment year 2018-19. Disallowance of expenditure relating to exempt income under section 14A read with rule 8D cannot exceed the exempt income earned during the relevant year. Where the taxpayer's voluntary disallowance already equalled the exempt income, no additional disallowance was warranted. The deletion of the further disallowance was sustained and the Revenue's appeal was dismissed. Highlights Income Tax Sat, 10 Oct 2026 08:32:32 +0530 https://www.taxtmi.com/highlights?id=104772