Amendment of section 43B.
14. In section 43B of the Income-tax Act, with effect from the 1st day of April, 2023,––
(i) in Explanation 3C, after the words “loan or borrowing”, the words “or debenture or any other instrument by which the liability to pay is deferred to a future date” shall be inserted;
(ii) in Explanation 3CA, after the words “loan or borrowing”, the words “or debenture or any other instrument by which the liability to pay is deferred to a future date” shall be inserted;
(iii) in Explanation 3D, after the words “loan or advance”, the words “or debenture or any other instrument by which the liability to pay is deferred to a future date” shall be inserted.
Notes on Clauses:
Clause 14 seeks to amend section 43B of the Income-tax Act relating to certain deductions to be allowed only on actual payment.
Explanations 3C, 3CA and 3D of the said section provide that a deduction of any sum, being interest payable under clauses (d), (da), and (e) of the said section, shall be allowed if such interest has been actually paid and any interest referred to in the said clauses which has been converted into a loan or borrowing or advance shall not be deemed to have been actually paid.
It is proposed to amend the said Explanations 3C, 3CA and 3D of the said section to provide that conversion of interest payable under clauses (d), (da), and (e) of the said section, into debenture or any other instrument by which liability to pay is deferred to a future date, shall also not be deemed to have been actually paid.
These amendments will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.
