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of <h1>Amendments to Section 43B clarify that converting interest into debentures doesn't count as actual payment for deductions.</h1> Section 43B of the Act mandates that deductions for interest payments to specified financial entities are only allowed upon actual payment. Some taxpayers have been claiming deductions by converting interest into debentures, arguing this as a constructive discharge of liability, a stance supported by some courts. This interpretation contradicts legislative intent, which aims to prevent deductions without actual payment. To address this, amendments to Explanations 3C, 3CA, and 3D of Section 43B are proposed, clarifying that converting interest into debentures does not constitute actual payment. These amendments are effective from April 1, 2023, for the assessment year 2023-24 onward.
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