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

Under Section 14(2) of the Income-tax Act, 2025, when can the Assessing Officer determine the expenditure relating to income not forming part of total income by a prescribed method?

The Assessing Officer may determine the expenditure by a prescribed method when, having regard to the assessee's accounts, he is not satisfied with the correctness of the expenditure claim or with the claim that no expenditure was incurred in relation to income not forming part of total income.

  1. AWhenever the assessee has any exempt income, without examining accounts
  2. BOnly when the exempt income exceeds the taxable income
  3. CWhen, having regard to the accounts, he is not satisfied with the correctness of the expenditure claim or the claim that no expenditure was incurredCorrect
  4. DOnly when the assessee agrees in writing

Explanation

Section 14(2) lets the Assessing Officer determine the amount by a prescribed method if, having regard to the accounts, he is not satisfied with the claimed expenditure or with the claim that no expenditure was incurred. It is not automatic and does not need the assessee's consent.

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