Circular No. 5/2012 — Disallowance u/s 14A — DTAT Rule 8D
Date: 2012-08-01 Status: ACTIVE Category: Business Income / Deductions Binding on Department: Yes (Section 119 / Section 400 IT Act 2025)
Summary
Mechanism for disallowance under section 14A read with Rule 8D. AO must record dissatisfaction before applying formula.
Key Directions
- AO must first examine assessee’s claim of expenditure against exempt income.
- Rule 8D formula only after recording dissatisfaction.
- Disallowance cannot exceed total expenditure claimed.
Applicability Under IT Act 2025
Saving Clause: Section 536 of IT Act 2025 saves circulars issued under the 1961 Act “so far as not inconsistent” with the new Act.
| Old Section (1961 Act) | New Section (2025 Act) | Consistent? |
|---|---|---|
| 14A | 20 | Yes |
Cross-References
Act Sections
- Section 14A
- Section 20
Related Circulars
- None identified
Key Case Law (Circular Supremacy)
- To be populated — cases where this circular was cited/applied
Full Text
Full text to be added — see raw/circulars/ for PDF when available
Source
- Official: incometaxindia.gov.in/circulars