Section 14A- Expenditure Incurred in Relation to Income Not Includible in Total Income

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According to subsection (1) of Section 14A of the Income Tax Act, 1961, while computing the total income under this Chapter, an assessee cannot claim a deduction on expenditure incurred on income that does not form part of the total income under this Act.

Further, the subsection (2) of Section 14A states that if an Assessing Officer is not satisfied with the claims made by an assessee with regards to expenditure incurred not forming part of the total income, then the Assessing Officer shall determine the expenditure incurred concerning the income that does not form part of the total income under this Act by using such method as may be specified.

Subsection 2, in simple words, states that if the Assessing Officer is not satisfied by the claims of an assessee then he may himself find out the expenditure incurred with regards to such income that does not form part of the total income under this Act as per the set procedure.

Subsection (3) of Section 14A of the Income Tax Act, 1961 states that sub-section (2) would also be applicable in cases where the assessee claims that he has incurred no expenditure regarding the income that forms the part of total income under this Act.