Section 194LC - Income by way of interest from Indian company. - Income-tax Act, 1961

1 [Income by way of interest from Indian company. 194LC. (1) Where any income by way of interest referred to in sub-section (2) is payable to a non-resident, not being a company or to a foreign company by a specified company 2 [or a business trust], the person responsible for making the payment, shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct the income-tax thereon at the rate of five per cent. 8 [Provided that in case of income by way of interest referred to clause (ib) of sub-section (2), the income-tax shall be deducted at the rate of four per cent. ] 13 [ Provided further that in case of income by way of interest referred to in clause (ic) of sub-section (2), the income-tax shall be deducted at the rate of nine per cent. ] (2) The interest referred to in sub-section (1) shall be the income by way of interest payable by the specified company 3 [or the business trust],- 4 [ (i) in respect of monies borrowed by it in foreign currency from a source outside India,- (a) under a loan agreement at any time on or after the 1st day of July, 2012 but before the 5 [ 1st day of July, 9 [ 2023 ] ]; or (b) by way of issue of long-term infrastructure bonds at any time on or after the 1st day of July, 2012 but before the 1st day of October, 2014; or (c) by way of issue of any long-term bond including long-term infrastructure bond at any time on or after the 1st day of October, 2014 but before the 5 [1st day of July, 9 [ 2023 ] ], as approved by the Central Government in this behalf; 6 [or] ] 7 [ (ia) in respect of monies borrowed by it from a source outside India by way of issue of rupee denominated bond before the 1st day of July, 10 [ 2023, or ] , and ] 11 [ (ib) in respect of monies borrowed by it from a source outside India by way of issue of any long-term bond or rupee denominated bond on or after the 1st day of April, 2020 but before the 1st day of July, 2023, which is listed only on a recognised stock exchange located in any International Financial Services Centre, 14 [ or ]] 15 [ (ic) in respect of money borrowed by it from a source outside India by way of issuance of any long-term bond or rupee denominated bond on or after the 1st day of July, 2023, which is listed only on a recognised stock exchange located in an International Financial Services Centre; and ] ( ii ) to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan or the bond and its repayment. Explanation.- For the purpose of this section- ( a ) foreign currency shall have the meaning assigned to it in clause ( m ) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999); ( b ) specified company means an Indian company. ] 12 [ (c) International Financial Services Centre shall have the meaning assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005; (28 of 2005.) (d) recognised stock exchange shall have the meaning assigned to it in clause (ii) of Explanation 1 to clause (5) of section 43. ] -------------------------------------------- Notes:- 1. Inserted vide Finance Act, 2012, w.e.f. 01-07-2012. 2. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014 . 3. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014 . 4. Substituted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of October, 2014 , before it was read as, ( i ) in respect of monies borrowed by it at any time on or after the 1st day of July, 2012 but before the 1st day of July, 2015 in foreign currency, from a source outside India,- ( a ) under a loan agreement; or ( b ) by way of issue of long-term infrastructure bonds, as approved by the Central Government in this behalf; and 5. Substituted vide THE FINANCE ACT, 2017 w.e.f. 1st day of April, 201 8, before it was read as, 1st day of July, 2017 6. Substituted vide THE FINANCE ACT, 2017 w.e.f. 1st day of April, 2018 , before it was read as, or 7. Inserted vide THE FINANCE ACT, 2017 w.e.f. 1st day of April, 2016 8. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 9. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as 2020 10. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as 2020 11. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 12. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 13. Inserted vide THE FINANCE ACT, 2023 dated 31-03-2023 w.e.f. 01-07-2023 14. Substituted vide THE FINANCE ACT, 2023 dated 31-03-2023 w.e.f. 01-07-2023 before it was read as, and 15. Inserted vide THE FINANCE ACT, 2023 dated 31-03-2023 w.e.f. 01-07-2023