Tuesday, 7 June 2016

Amendment in Rule 8D of Income Tax Rules

New Delhi, the 02nd June, 2016

S.O. 1949(E)- In exercise of the powers conferred by section 295 read with subsection (2) of section 14A of the Income-tax Act, 1961 (43 of 1961), the Central
Government hereby makes the following rules further to amend the Income-tax Rules,
1962, namely:-
1. (1) These rules may be called the Income–tax (14th Amendment) Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules 1962, in rule 8D,-

(I) for sub-rule (2), the following sub-rule shall be substituted, namely:-
“(2) The expenditure in relation to income which does not form part of the total income
shall be the aggregate of following amounts, namely:—
(i) the amount of expenditure directly relating to income which does not form part of
total income; and

(ii) an amount equal to one per cent of the annual average of the monthly averages of the
opening and closing balances of the value of investment, income from which does not or
shall not form part of total income:
Provided that the amount referred to in clause (i) and clause (ii) shall not exceed the tota expenditure claimed by the assessee.”;

(II) sub-rule (3) shall be omitted

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