Limitation of Interest Deduction - Section 94B

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..... lar expense like guarantee commission etc.) claimed by an Indian company or a permanent establishment of a Foreign company in India in respect of any debt issued by a non-resident being an associated enterprises shall not deductible in computation of income under the Profits Gains of business or profession to the extent that it arises from excess interest. Limit of Interest: Provision of this sect .....

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..... ed from the applicability of the provisions of this section Interest paid in respect of debt issued by a lender which is PE in India of Non-resident, being a person engaged in the business of banking. an Indian company or permanent establishment of a foreign company which is engaged in the business of banking and insurance or such class of non-banking financial companies [or a Finance Company loca .....

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..... Calculation of Excess Interest [ Section 94B(2) ] Total Interest paid or payable in excess of 30% of its earnings before interest, taxes, depreciation and amortization (EBIDTA) of the borrower in the previous year or Interest paid or payable to Associated Enterprises whichever is LOWER. Carry Forward of Excess Interest [ Section 94B(4) ] The amount of interest expenditure disallowed under this pr .....

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