Interest taxation limited by treaty to a capped withholding; exemptions apply for public authorities and specified financial institutions. Taxation of cross-border interest under the India-Ireland convention restricts source-state taxation by providing that interest paid to a resident of the other Contracting State may be taxed in the recipient's State, while the source State may also tax such interest subject to a treaty cap for beneficial owners. Exemptions at source apply for interest derived by or connected with loans from specified public authorities and designated financial institutions. Interest is defined broadly as income from debt-claims but excludes dividends and penalty charges. Interest connected to a permanent establishment or fixed base is taxed under the rules for business profits or independent personal services, and amounts exceeding arm's length interest remain taxable under domestic law.