Deductibility of interest: pre use interest on capital borrowings disallowed; banks get conditional extra deduction for redemption income.

Amendment excludes deduction for interest on capital borrowed for acquisition or extension of business from the date of borrowing until the asset is first put to use, whether capitalised or not. It permits banks an optional additional deduction limited to income from redemption of securities under specified government schemes, conditional on disclosure under "Profits and gains of business or profession." It substitutes reference to an Exchange Risk Administration Fund and allows deduction for non capital expenditure by statutory corporations for authorised objects.

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