Amendments to Section 14A vide Finance Act, 2022 – Clarificatory or Ambiguity?

  • Blog|Income Tax|News|
  • |
  • < 1 minute
  • By Taxmann
  • |
  • Last Updated on 11 April, 2022

Section 14a income tax

Madhvi Desai – [2022] 137 128 (Article)

Section 14A had been introduced vide Finance Act, 2001 with retrospective effect from AY 1962-63.

The basic premise of Section14A is to discourage assessee to claim expenditure against such income which is not part of the total income. Memorandum explaining introduction of Section14A gives reference to principle of taxability of net income, according to which only net income i.e. Gross income minus the expenditure is taxed. On the same analogy, the exemption is also in respect of the net income. Expenses incurred can be allowed only to the extent of they are related to earning taxable income.

Over the years, Section14A has become one of the hot topics of the litigation. There is plethora of judicial precedents on the subject matter. Still the matter remains unsettled.

CBDT vide Circular No.5/2014 dated 11.02.2014 has clarified to provide for disallowance of expenditure even where taxpayer in a particular year has no corresponding exempt income.

However, over the years, courts used to take rational view in this matter. According to judiciary, when there is no exempt income in a particular year, no disallowance is warranted. To nullify the effects of such decisions, revenue has once again used the weapon of amendments. This is one more classic instance of stringent attitude of the revenue!

Click Here to Read the Full Article

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied