The CBDT has amended Rule
8D for computation of
disallowance u/s 14A of Income Tax Act, 1961 vide Income-Tax (Fourteenth
Amendment) Rules, 2016 and clarifies that:-
a) Sub-clause (ii) in Rule 8D(2) is
deleted, which dealt with computation of expenditure towards interest (not
directly attributable to any particular income/ receipt) as per the prescribed
formula
b) The rate to be applied on annual average
value of investments has been increased from 0.5% to 1%
c) The amount of disallowance as computed
under Rule 8D shall not exceed total expenditure claimed by the assessee
d) Amended Rule shall come into force on
the date of its publication in the Official Gazette
