The Central Board of Direct Taxes vide notification dated 22 September, 2023 has directed that any sum payable by the assessee as interest on any loan or borrowing from following entities in accordance with the terms and conditions of the agreement governing such loan or borrowing, shall be deducted for computing the income of the previous year, given that the sum is actually paid by him:
- All NBFC’s in top level
- All NBFC’s in upper level
- All NBFC’s in lower level
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 dated October 22, 2021.