Aishwarya Rai wins ₹4 crore tax battle after ITAT Mumbai verdict

Bollywood star Aishwarya Rai Bachchan has reportedly secured relief in a recent income tax dispute. The Income Tax Appellate Tribunal (ITAT), Mumbai, has given a ruling in her favour, setting aside a disallowance of around ₹4 crore raised earlier by the tax authorities for Assessment Year 2022–23.

As per reports, the issue  revolved around the application of Section 14A of the Income Tax Act – a section that bars expenses from being claimed as deductions if they are linked to generating tax-exempt income.

The actress had declared income of nearly ₹39.33 crore, which included about ₹2.14 crore earned from investments that do not attract tax. She had voluntarily disallowed expenses of around ₹49.08 lakh, stating that there were no direct costs spent to generate that exempt income.

According to reports by a business news website, the tax department argued that the Assessing Officer (AO) had properly applied Section 14A together with Rule 8D. 

However, Aishwarya’s team countered that the AO had not presented adequate satisfaction or reasoning before making the disallowance and had ignored her detailed submissions.

They further pointed out that the AO’s disallowance of approximately ₹4.60 crore was disproportionate, considering her total expenditure declared for the year was only ₹2.48 crore.

The tribunal has now removed the disallowance, leading to a significant tax relief for the actress.