Income From Other Sources
Section 56 of IT Act 1961 includes Dividend income, but 10(34) exempt it subject to the section 115BBDA which clearly says no deduction with respect to any expenses or allowances can be allowed for the declaration of income under Sub-Section (1)(a) of 115BBDA but However section 57 (1) says any expenses incurred in form of commission /brokerage in order to claim dividends or interest on securities can be deducted isn’t this contreversial to the section 115BBDA?If not, Then kindly let me know that deduction of expenses on earning the dividends can be claimed or not?and why?
Dividend from Indian company is exempt in the hands of receiver. In the Budget for FY 2016-17 it become taxable beyond Rs 10 Lac @ 10%. Another golden rule is expenses incurred for exempt income cant be claimed or will not be allowed deduction against taxable income.
AS there is specific exclusion in the Sec 115BBDA towards expenses incurred on earning dividend same can t be claimed as expenses.