Non-resident exemption from tax on loan interest permits payment without tax deduction at source, subject to beneficial ownership declaration. Non resident persons holding specified government defence loans are exempt from income tax on interest and entitled to receive interest without deduction at source under section 193. Resident persons are taxable on such interest, though resident individuals are exempt from deduction at source under clause (ia) of the proviso to section 193; resident persons other than individuals remain subject to deduction. Foreign banks must furnish a declaration of beneficial ownership to the Public Debt Office; tax treatment of interest payments follows the declared beneficial ownership status.