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CS Executive · Tax Laws and Practice · Incomes which do not form part of Total Income

If the Assessing Officer is not satisfied with an assessee's claim that no expenditure was incurred in relation to income not forming part of total income, how is the disallowable amount determined under Section 14 of the Income-tax Act, 2025?

The Assessing Officer determines the expenditure in accordance with any method as may be prescribed. Section 14(2) applies when he is not satisfied with the expenditure claim or with the claim that no expenditure was incurred in relation to income outside total income.

  1. ABy any method as may be prescribedCorrect
  2. BAt a flat 10% of the exempt income by statute
  3. CAt the amount the assessee states in the claim
  4. DIt is taken as nil

Explanation

Section 14(2) says that where the Assessing Officer is not satisfied with the correctness of the expenditure claim or the claim that no expenditure was incurred, he determines the expenditure under a prescribed method. The text fixes no flat percentage, and the assessee's claim is not binding.

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