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Section 94B thin cap limits interest deduction to:

A50% of EBITDA
B10% of TI
C30% of EBITDA (borrowings from AE > Rs. 1 crore)
DUp to 12% rate (per relevant Section) (per relevant Section)
Answer & Solution
Correct answer: C. 30% of EBITDA (borrowings from AE > Rs. 1 crore)
1. Section 94B (FA 2017, BEPS Action 4): restricts interest deduction on AE borrowings. 2. Interest deduction limited to 30% of EBITDA; disallowed portion c/f 8 years. 3. Threshold: interest expenditure on AE borrowings > Rs. 1 crore. Banks/insurance exempted. _Source: ICAI BoS CA Final Paper 7, Ch 24 "Transfer Pricing"_
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