{"id":620,"date":"2015-11-21T12:55:31","date_gmt":"2015-11-21T12:55:31","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=620"},"modified":"2024-06-14T13:24:24","modified_gmt":"2024-06-14T07:54:24","slug":"tds-update","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/tds-update\/","title":{"rendered":"No TDS on interest paid to Non resident on FCCB"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d068287deed\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d068287deed\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/tds-update\/#No_tds_us_196c_rws_115ac_on_interest_paid_to_nr_on_FCCB_when_the_borrowed_sum_was_utilized_by_payer_for_its_overseas_business\" title=\"No tds (u\/s 196c r.w.s. 115ac) on interest paid to nr on FCCB when the borrowed sum was utilized by payer for its overseas business\">No tds (u\/s 196c r.w.s. 115ac) on interest paid to nr on FCCB when the borrowed sum was utilized by payer for its overseas business<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/tds-update\/#FACTS_OF_THE_CASE\" title=\"FACTS OF THE CASE\">FACTS OF THE CASE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/tds-update\/#DECISION_OF_THE_TRIBUNAL\" title=\"DECISION OF THE TRIBUNAL\">DECISION OF THE TRIBUNAL<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17868\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/11\/download-300x158.jpg\" alt=\"TDS update\" width=\"805\" height=\"424\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/11\/download-300x158.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/11\/download.jpg 310w\" sizes=\"(max-width: 805px) 100vw, 805px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"No_tds_us_196c_rws_115ac_on_interest_paid_to_nr_on_FCCB_when_the_borrowed_sum_was_utilized_by_payer_for_its_overseas_business\"><\/span><em><span style=\"color: #993300;\">No <a href=\"https:\/\/carajput.com\/tds.php\">tds<\/a> (u\/s 196c r.w.s. 115ac) on interest paid to nr on FCCB when the borrowed sum was utilized by payer for its overseas business<\/span><\/em><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #993300;\"><strong><em>NO <a href=\"https:\/\/carajput.com\/tds.php\">DEDUCT TAX AT SOURCE<\/a> (U\/S 196C R.W.S. 115AC) ON INTEREST PAID TO NR ON FOREIGN CURRENCY CONVERTIBLE BONDS WHEN BORROWED SUM WAS UTILIZED BY PAYER FOR ITS OVERSEAS BUSINESS <\/em><\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ff9900;\"><strong>ADIT v. Adani Enterprise Ltd. [Ahmedabad ITAT] ITA No. 2329 of 2011 <\/strong><strong>Date of Decision: September 02, 2015<\/strong><\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"FACTS_OF_THE_CASE\"><\/span><span style=\"color: #993300;\"><strong><span style=\"text-decoration: underline;\">FACTS OF THE CASE<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">The assessee-company remitted a certain sum to non-resident investors towards interest payable on foreign currency convertible bonds (FCCBs) issued by the assessee.<\/p>\n<p style=\"text-align: justify;\">But the assessee-company did <a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\">not deduct TDS<\/a> on grounds that interest income was not received by a non-resident in India.<\/p>\n<p style=\"text-align: justify;\">The monies of the debts raised in foreign currencies by the assessee are primarily invested in the foreign subsidiary, which in turn is involved in financing further business abroad.<\/p>\n<p style=\"text-align: justify;\">Part of those funds which have not been invested in the subsidiary has been placed in banks abroad and the interest income received from the Time Deposits placed outside India was offered for taxation.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"DECISION_OF_THE_TRIBUNAL\"><\/span><span style=\"color: #993300;\"><strong><span style=\"text-decoration: underline;\">DECISION OF THE TRIBUNAL<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">The Appellate Tribunal held that the interest paid by the appellant on its FCCBs is covered by exceptions to section 9(1)(v)(b) of the <a href=\"https:\/\/carajput.com\/income-tax-services.php\">Income Tax Act,<\/a> and consequently, it shall fall outside the ambit of deemed income arising or accruing in India under section 5 of the Act also.<\/p>\n<p style=\"text-align: justify;\">Section 9(1)(v)(c) states that carves out an exception in respect of interest payable by a person who is resident that in a case where the interest is payable in respect of any debt incurred or money borrowed and used for the purposes of a business or investment outside India, then such interest income cannot be said as even deemed to accrue or arise in India.<\/p>\n<p style=\"text-align: justify;\">Therefore, it is held that the appellant- company was not liable to TDS U\/S 196C r.w.s. 115AC of the Act. Since there is no liability to deduct tax at source, as a consequence, appellant-company cannot be treated as the assessee in default u\/s 201(1).<\/p>\n<p>More read :<\/p>\n<ul>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/archives\/tcs-and-tcs-rate-chart-for-fy-2024-25.pdf\" data-cke-saved-href=\"https:\/\/carajput.com\/archives\/tcs-and-tcs-rate-chart-for-fy-2024-25.pdf\"><strong>TDS &amp; TCS Rate chart for FY 2024-25<\/strong><\/a><\/span><\/li>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/blog\/quick-overview-on-income-tax-deduction-u-s-80c-80u\/\">quick overview on income tax deduction u\/s-80c-80u<\/a><\/span><\/li>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/learn\/documents-required-for-registration-us-12a-80g-and-trust-registration.html\">Documents required for registration u\/s 12A<\/a><\/span><\/li>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/blog\/new-income-tax-scheme-30-percent-additional-deduction-on-new-payroll-expenses-for-certain-assesses-section-80jjaa\/\">Additional deduction on new payroll expenses<\/a><\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\">For query or help, contact: <a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0\u00a0or call at 9555555480<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No tds (u\/s 196c r.w.s. 115ac) on interest paid to nr on FCCB when the borrowed sum was utilized by payer for its overseas business NO DEDUCT TAX AT SOURCE (U\/S 196C R.W.S. 115AC) ON INTEREST PAID TO NR ON FOREIGN CURRENCY CONVERTIBLE BONDS WHEN BORROWED SUM WAS UTILIZED BY PAYER FOR ITS OVERSEAS BUSINESS &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,15],"tags":[3490,3487,5,3491,322],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/620"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=620"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/620\/revisions"}],"predecessor-version":[{"id":893,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/620\/revisions\/893"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}