Withholding on foreign currency bonds and shares requires the payer to deduct tax on interest and dividends to non-residents.

Insertion of section 196C mandates withholding on payments of interest or dividends payable to non-residents on specified foreign-currency bonds or shares of Indian companies; the person responsible for the payment must deduct income-tax at the prescribed rate at the earlier of credit to the payee's account or actual payment, regardless of payment mode.

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