Limitation on interest deduction disallows excess interest to non resident associated enterprises, protecting the tax base. Limitation on interest deduction disallows interest or similar payments in respect of excess interest paid by an Indian company or a permanent establishment of a foreign company to a non resident associated enterprise when aggregate interest exceeds the monetary threshold; debt from unrelated lenders is deemed associated where an associated enterprise guarantees the debt or provides matching funds. 'Excess interest' is the lesser of interest exceeding thirty percent of borrower EBITDA or interest paid to associated enterprises. Disallowed interest may be carried forward for up to eight succeeding tax years and utilised to the extent of allowable interest in those years, with specified banking, insurance and IFSC finance company exceptions.