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of <h1>India's Section 94B Limits Interest Deductions to 30% of EBITDA, Aligning with OECD BEPS Action 4 Recommendations</h1> The OECD's Base Erosion and Profit Shifting (BEPS) Action 4 addresses the issue of multinational groups using interest deductions to erode tax bases in high-tax jurisdictions. It proposes a common approach linking interest deductions to economic activity through EBITDA-based rules: the Fixed Ratio Rule, Group Ratio Rule, and Targeted Rules for specific sectors like banking and insurance. The 2016 update provides further guidance on these rules. By mid-2019, many countries, including EU members, had adopted these recommendations. India's Section 94B of the Income Tax Act aligns with BEPS Action 4, capping interest deductions at 30% of EBITDA.
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