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The Central Board of Direct Taxes issues the Income-tax (14th Amendment) Rules, 2016 to amend rule 8D of the Income-tax Rules, 1962. The rules apply to the determination of expenditure in relation to income which does not form part of total income. The amended sub-rule sets the aggregate amount as direct expenditure plus one percent of the annual average of monthly averages of investment balances. The total amount must not exceed the total expenditure claimed by the assessee. Sub-rule (3) of rule 8D is omitted. The rules come into force on the date of publication in the Official Gazette.
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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES
NOTIFICATION
New Delhi, the 02nd June, 2016
S.O. 1949(E)- In exercise of the powers conferred by section 295 read with sub- section (2) of section 14A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
(I) for sub-rule (2), the following sub-rule shall be substituted, namely:- “(2) The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts, namely:— (i) the amount of expenditure directly relating to income which does not form part of total income; and (ii) an amount equal to one per cent of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income: Provided that the amount referred to in clause (i) and clause (ii) shall not exceed the total expenditure claimed by the assessee.”;
(II) sub-rule (3) shall be omitted.
[Notification No. 43/2016] [F.No. 370142/7/2016-TPL]
(Dr. T.S. Mapwal)
Under Secretary to Government of India
Note:- The principal rules were published vide Notification S.O. 969 (E), dated 26th March, 1962 and last amended by Income-tax (13th Amendment) Rules, 2016 vide Notification S.O.1923(E), dated 31.05.2016.
