Rules 26, 29BA, 30, 31, 31A, 37BB and 37BC

TDS from Payment to Non-Residents

A. TDS from payment of interest from infrastructure debt fund [Section 194LB]

(i) With effect from 1-6-2011, where any income by way of interest is payable to a non-resident, not being a company, or to a foreign company, by an infrastructure debt fund referred to in section 10(47), the person responsible for making the payment shall, at the time of credit of such income to the account of payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon.

(ii) Tax will be deducted at the rate of 5 per cent.

B. TDSon income by way of interest from Indian Company [Section 194LC]

Section 194LC provides that --

(a) Where any income by way of interest referred to infra is payable to a non-resident, not being a company or to a foreign company by an Indian company or a business trust, the person responsible for making the payment, shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct the income-tax thereon at the rate of five per cent. However, in case of income by way of interest referred to clause (ib) of sub-section (2), the income-tax shall be deducted at the rate of four per cent.

(b) The interest referred to above shall be the income by way of interest payable by an Indian company or a business trust, --