9. New section 34c

The principal Act is amended by inserting after section 34b the following section:

“Special provision applicable to adjusted income from a discount or premium 34c.  (1)  Notwithstanding section 33 but subject to this section, in ascertaining the adjusted income of a company from a source consisting of discount or premium, any expenses in respect of the discount or premium incurred on bond issued or subscribed, as the case may be, by that company is deemed to accrue to the company over the whole period of the bond and the amount to be deducted from the gross income from that source for the basis period for a year of assessment that relates to the period of the bond shall be a sum to be determined in accordance with the following formula:

AXC

B where

A is the number of days in the basis period for the year of assessment that falls within the period of the bond;

B is the total number of days of the whole period of the bond; and

C is the total amount of discount or premium incurred in respect of the bond:

Provided that the Director General may allow the company to consistently apply any other formula which is in accordance with the generally accepted accounting principles applicable during that basis period.

Where any deduction in respect of expenditure referred to in subsection (1) is made under this section, no deduction in respect of that expenditure shall be made under section 33, 34, 34a or 34b.”.