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TMI BlogApproval of long term bonds and rate of interest for the purpose of Section 194LC of the Income-tax Act, 1961- regarding.X X X X Extracts X X X X X X X X Extracts X X X X ..... bonds and rate of interest for the purpose of Section 194LC of the Income-tax Act, 1961- regarding. Section 194LC of the Income-tax Act, 1961 , introduced by the Finance Act 2102 , provided for lower withholding tax at the rate of 5% on the interest payments by Indian companies on borrowings made in foreign currency by such companies from a source outside India. The benefit was available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional rate of withholding tax has been extended to borrowing by way of any long term bonds, not limited to a long term infrastructure bond, if the borrowing is made on or after 1st day of October, 2014. Further, the concluding date of the period of borrowings eligible for concession under Section 194LC which was earlier 01/07/2015 has been extended to borrowings made before the 1st day of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s:- a. The bond issue is at any time on or after 1st day of October, 2014 but before the 1st day of July, 2017. b. The bond issue by the Indian company should comply with clause (d) of sub-section (3) of section 6 of the Foreign Exchange Management Act, 1999 read with Notification No.FEMA-3/2000-RB viz. Foreign Exchange Management (Borrowing or Lending in Foreign exchange) Regulations 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. In view of the above, any bond issue, which satisfies the above conditions, would be treated as approved by the Central Government for the purposes of section 194LC . 7. It is also clarified that consequent to the amendment to section 194LC the approval of the Central Government contained in Circular No.07/2012, in so far as they apply to borrowings by way of a loan agreement, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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