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Section - 194LC - Extension of eligible period of concessional tax rate on interest in case of External Commercial Borrowing and Extension of benefit to Rupee Denominated Bonds -

 

The existing provision provides that interest payable to a non resident by an Indian entity on borrowings made by it in foreign currency under loan agreement  or  by issue of any long term bond will be subject to TDS at 5% only. This is subject to the condition that borrowing is made under the loan agreement before the first day of July 2017. The amendment now  seeks to extend the period during which the loan agreement can be made. It is now provided that the concessional rate of 5% TDS will be available in respect of borrowings made before 01.07.2020.

 

The amendment is effective from 1st April 2018 relevant to assessment year 2018-19.


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