Interest on securities, bonds and debentures is outside interest-tax where the charging provision covers only loans and advances.

Interest on securities, bonds and debentures does not fall within "interest on loans and advances" under section 2(7) of the Interest-tax Act, because the charging provision is exhaustive and covers only interest on loans and advances made in India. Such instruments are investments, not loans and advances, and their treatment remains distinct from interest on loans under the Income-tax Act. The absence of a specific exemption in the revised statute cannot widen the charging section by implication, and a departmental instruction cannot override the statutory text. On that basis, interest from securities, bonds and debentures is outside the charge to interest-tax.

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Issues: Whether interest on securities, bonds and debentures falls within the expression "interest on loans and advances" under section 2(7) of the Interest-tax Act and is therefore chargeable to interest-tax.

Analysis: The definition in section 2(7) confines chargeable interest to interest on loans and advances made in India and uses exhaustive wording, with inclusions and exclusions specifically stated. Interest on securities, bonds and debentures is distinct from interest on loans and advances; investments in such instruments are not loans and advances. The distinction is reinforced by the separate treatment of interest and interest on securities under the Income-tax Act. The absence of a specific exemption in the revised Interest-tax Act cannot enlarge the charging provision by implication, and the departmental instruction cannot override the statutory text.

Conclusion: Interest on securities, bonds and debentures is not chargeable to interest-tax under section 2(7) of the Interest-tax Act.

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