Commercial Papers (CPs) and Certificates of Deposits (CDs)--Applicability of provisions of section 194A of the Income-tax Act, 1961--Clarification regarding

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..... 7 Dated 22/3/1993 The Certificates of Deposit (CDs) and the Commercial Papers (CPs) are money-market related instruments which are traded in the secondary market. These are negotiable instruments in the nature of usance promissory notes which are issued and regulated in accordance with the instructions/guidelines issued by the Reserve Bank of India from time to time. 2. While, in terms of .....

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..... t liable to deduction of tax at source. 4. It is clarified for the information of all concerned that the difference between the issue price and the face value of the Commercial Papers and the Certificates of Deposits is to be treated as "discount allowed" and not as "interest paid". Hence, the provisions of the Income-tax Act relating to deduction of tax at source are not applicable in the case .....

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