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F No 149/222/2015-TPL (Part-I)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
New Delhi, 29th
October, 2015
Subject: Taxation of
income from off-shore Rupee Denominated Bonds-reg.
The Reserve Bank of India has recently
permitted Indian corporates to issue rupee denominated bonds outside India.
The matter of taxation of income from such
bonds under Income-tax Act, 1961 has been considered by the Government.
In so far as taxation of interest income from
these INR off-shore bonds in the case of non-resident investors is concerned,
it is clarified that withholding tax at the rate of 5 percent, which is in the
nature of final tax, would be applicable in the same way as it is applicable
for off-shore dollar denominated bonds.
Further, it has been decided that the Capital
gains, arising in case of appreciation of rupee between the date of Issue and
the date of redemption against the foreign currency in which the investment is
made; would be exempted from capital gains tax. Legislative amendment in this
regard will be proposed through the Finance Bill, 2016.
(Shefali Shah)
Pr. Commissioner of
Income Tax (OSD)
Official Spokesperson, CBDT
Official Spokesperson, CBDT
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