Interest

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..... the interest, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.] 3. Notwithstanding the provisions of paragraph 2 : (a) interest arising in a Contracting State shall be exempt from tax in that Contracting State provided it is derived and beneficially owned by : (i) the Government, a political sub-division or local authority of the other Contracting State; or .....

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..... e other Contracting State in charge of the public financing of external trade. 4. The term "interest" as used in this article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from Government securities and income from bonds or debentures, including pre .....

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..... ed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that Contracting State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the int .....

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..... ther provisions of this Convention. ************** NOTES:- 1. Substituted vide Notification No. 650(E) dated 10-07-2000 w.e.f. 01-04-1995 before it was read as, "2. However such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but f the recipient is the beneficial owner of the interest, the tax so charged shall not exceed: .....

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..... aranteed by a bank or other financial institution carrying on bona fide banking or financial business or an insurance company or by an enterprise which holds directly or indirectly at least 10 per cent. of the capital of the company paying interest ; (b) 15 per cent. of the gross amount of the interest in all other cases.]" 3. Substituted vide Notification No. S.O. 2106 (E) dated 12-08-20 .....

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