Interest deduction limitation exemption for bank permanent establishments: interest on loans from bank PEs in India remains deductible.

The amendment exempts from the statutory interest deduction limitation any interest paid in respect of debt issued by a lender which is a permanent establishment in India of a non resident engaged in banking. Thus, the limitation on deductibility of interest payable to associated non resident lenders will not apply where the lender is a banking permanent establishment in India; the change is prospective and applies from the fiscal year specified in the amendment.

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