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of <h1>Interest deduction capped for payments to non-resident associated enterprises where excess interest exceeds 30% of EBITDA limit</h1> An Indian company or a permanent establishment of a foreign company cannot deduct interest over Rs.1 crore paid to a non-resident associated enterprise to the extent it exceeds the 'excess interest' limit, defined as total interest exceeding the lesser of 30% of EBITDA or interest paid to associated enterprises. Debt guaranteed by or matched with funds from an associated enterprise is treated as issued by that associated enterprise. Exemptions apply to entities in banking, insurance, certain finance companies and notified NBFCs. Disallowed interest may be carried forward up to eight assessment years and allowed subject to the same 30%/associated-enterprise limitation. Definitions of debt and associated enterprise are prescribed.
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