Vimal (P) Ltd. is a resident Indian company having registered office in Kota. On 1st April, 2024 it borrowed a sum of ₹ 22 crores from a company ZEENA Ltd. incorporated in UK, which is the holding company of Vimal (P) Lt

Computation of interest to be allowed as per section 94B for M/s Vimal (P) Ltd. Particulars Rs. in lakhs Rs. in lakhs Net Profit - as reported 300.00 Add: Expenses already debited Interest (₹ 2200 lacs @9.5%) 209.00 Depreciation 70.00 Provision for income tax 80.00 Amortization expenses 30.00 389.00 EBITDA 689.00 Lower of the following shall be disallowed Interest paid or payable by Vimal (P) Ltd to AE 209.00 Total interest paid or payable in excess of 30% of EBITDA [₹ 209.00 - ₹ 206.70 (₹ 689.00 x @ 30%)] 2.30 2.30 Interest allowable as deduction 206.70 Amount of interest liable for disallowance 2.30 Working note Where an Indian company pays interest in respect of any debt issued by a non-resident being an associated enterprise or from third party and such borrowing is guaranteed by an associated enterprise, and where such interest expenditure exceeds ₹ 1 crore, then the interest paid or payable by such company in excess of 30% of its EBITDA is liable for disallowance. Disallowed interests of ₹ 2.30 lakhs are eligible for carry forward to the subsequent 8 assessment years and will be allowed as deduction while computing Profits and gains of business or profession, to the extent it is allowable under section 94B.