Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: list of goods taxed at 4% :: empanelment :: VAT Audit :: TDS :: due date for vat payment :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
News Headlines »
 How to claim income tax refund
 How to time your buys to have best of two tax regimes
 Here's why you must always check Form 26AS before filing tax return
 Want to file your income tax return after June 30? Having Aadhaar card is a must
 Timeline for filing of tax returns extended by two months
 Top 5 common mistakes to avoid while filing your income tax returns
 GST rollout on July 1: Deadline for filing tax returns extended
 What is GST?
 Income-tax (15th Amendment) Rules, 2017?
 Banks get a breather as GST Council extends deadline for tax filing
 Income Tax filing: Your easy guide in 7 steps

Foreign cos' income from interest on bonds taxable: AAR
November, 03rd 2008

Foreign firms may now have to think twice before advancing money to Indian firms by subscribing to their bonds because a recent ruling by a tax authority has clarified that such interest income by foreign firms is taxable here.

Giving the ruling in the case of US-based LMCC, the Authority for Advance Ruling (AAR) said: "Payments made to LMCC in the form of interest up to the date of conversion of bonds into equity shares are nothing but interest paid on the money advanced to the applicant... And it is accordingly liable to be taxed as LMCC's income."

The ruling was sought by an Indian non-banking finance company which had asked the AAR whether the interest paid by it to the US-based LMCC on the bonds issued for funding its business in the country was taxable here.

The Indian NBFC, which did not wish to be dentified, invests in various businesses in the country and abroad in the form of securities including shares and debentures.

In this case, the company, to fund its business in India, proposed to borrow from LMCC by issuing fully convertible bonds under the foreign direct investment schemes.

"Basically what happens is that the money is advanced to the applicant as a financial package, for which the applicant executes the debenture bonds and till they are converted into shares, the applicant keeps paying interest on the amount covered by bonds. Obviously, the interest is paid in respect of debt. There is no other way of understanding the transaction," the AAR explained.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions