CBDT Clarifies Borrowing Costs: Bill Discounting Charges and Related Expenses Included per Circular No. 10/2017.
Borrowing cost refers to the interest and other expenses incurred when a person borrows funds. This includes commitment charges, amortized discounts or premiums related to borrowings, processing charges, and costs under finance leases or similar arrangements. The Central Board of Direct Taxes (CBDT) clarified in Circular No. 10/2017, dated March 23, 2017, that bill discounting charges and other similar expenses are also considered borrowing costs.
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