There are specific provisions in the Act read with Rules under which a portion of borrowing cost may get disallowed under sections like 14A, 438, 40(a)(i), 40(a)(ia), 40A(2)(b), etc of the Act. Whether borrowing costs to be capitalized under ICDS-IX should exclude portion of borrowing costs which gets disallowed under such specific provisions.

Non-Deductible Borrowing Costs Excluded from Capitalization Under ICDS IX, Aligning with Sections 14A, 438, 40(a), 40A(2)(b.

Borrowing costs that are disallowed under specific provisions of the Act, such as sections 14A, 438, 40(a)(i), 40(a)(ia), and 40A(2)(b), should be excluded from capitalization under ICDS IX. The provisions of the Act take precedence over ICDS, meaning only the portion of borrowing costs that are allowable as deductions under the Act can be capitalized. This ensures that only deductible borrowing costs are included in the capitalization process, aligning with the overriding provisions of the Act.