Skip to content

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

Which of the following correctly identifies who determines the amount of expenditure under section 14(2) of the Income-tax Act, 2025, and when this power arises?

Under section 14(2), the Assessing Officer determines the expenditure by a prescribed method when, having regard to the accounts, he is not satisfied with the correctness of the expenditure claim or with the assessee's claim that no expenditure was incurred in relation to exempt income.

  1. AThe Assessing Officer, when not satisfied with the correctness of the expenditure claim or with a claim of nil expenditure, having regard to the assessee's accountsCorrect
  2. BThe Central Government, whenever exempt income exceeds taxable income
  3. CThe assessee, by choosing any method it considers reasonable, after the assessment
  4. DThe Assessing Officer, only when the assessee's claim of expenditure is higher than the exempt income

Explanation

Section 14(2) gives the power to the Assessing Officer. It arises when, having regard to the accounts, he is not satisfied with the correctness of the claimed expenditure (clause a) or with a claim that no expenditure was incurred (clause b). There is no condition linking it to the size of the exempt income, and the method is prescribed rather than chosen by the assessee.

Did you get it right without looking?

One question tells you little. A timed set on Incomes which do not form part of Total Income shows your real accuracy, how long you take and where you lose marks.

Practise Incomes which do not form part of Total IncomeFree diagnostic mock

More Incomes which do not form part of Total Income questions