Payment of Interest to Co-operative Banks shall be allowed on actual payment basis as is allowed in case of scheduled bank or public financial institutions etc. u/s 43B - Budget 2017-18 w.e.f. AY 2018-19

Clause - 017 - Amendment of section 43B.

THE FINANCE BILL, 2017

Clause 17 of the Bill seeks to amend section 43B of the Income-tax Act relating to certain deductions to be only on actual payment.

The said section inter alia, provides that any sum payable by the assessee by way of tax, cess, duty or fee, or interest on any loan or borrowing from any scheduled bank or public financial institution, etc., shall be allowed as deduction of the previous year in which the liability to pay such sum was incurred (relevant previous year) and if the same is actually paid on or before the due date of furnishing of the return of income.

It is proposed to amend the said section so as to provide that any sum payable by the assessee as interest on any loan or advances from a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank shall also be allowed as deduction, if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year.

It is further proposed to include the definitions of the expressions "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" in the said section.

These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.

Dated: 3-2-2017