Central Board of Direct Taxes (CBDT) has recently issued a crucial notification concerning the payment of interest on loans to Non-Banking Financial Companies (NBFCs) under Section 43B(da) of the Income Tax Act. This notification, dated September 22, 2023, brings forth significant implications for both NBFCs and borrowers.
Ministry of Finance
(Department of Revenue)
(Central Board of Direct Taxes)
S.O. 4193(E).— In exercise of the powers conferred by clause (da) of section 43B of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following classes of non-banking financial companies (NBFCs), for the purpose of the said clause, namely:–
(a) all NBFCs classified in the Top Layer;
(b) all NBFCs classified in the Upper Layer;
(c) all NBFCs classified in the Middle Layer.
Explanation.– The classification of NBFCs in the Top Layer, Upper Layer and Middle Layer shall be according to the Reserve Bank of India’s guidelines contained in Circular DOR.CRE.REC.No.60/03.10.001/2021-22 dated October 22, 2021.
2. This notification shall come into force from the date of its publication in the Official Gazette.
[Notification No. 80/2023/F. No.370142/31/2023-TPL]
JIVITESH ANAND, Under Secy.