Taxability of interest remitted by branches of banks to the head office situated abroad, under the Foreign Currency Packing Credit Scheme of Reserve Bank of India

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..... Circular No. 740 Dated 17/4/1996 The Reserve Bank of India has introduced a Foreign Currency Packing Credit Scheme (FCPCS) for Indian exporters. Under this scheme, the authorised dealers in India can arrange for lines of credit from abroad for providing preshipment credit to Indian exporters at internationally competitive rates of interest. Such credit can also be arranged by Indian bran .....

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..... company is assessed to tax provides for a lower rate of taxation, the same would be applicable. Consequently, tax would have to be deducted accordingly on the interest remitted as per the provisions of section 195 of the Income-tax Act, 1961. (Sd.) Siddhartha Mukherjee, Secretary, Central Board of Direct Taxes. - Circular - Trade Notice - Public Notice - Instructions - Office orders Ta .....

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