Commercial Papers (CPs) and Certificates of Deposits (CDs)--Applicability of provisions of section 194A of the Income-tax Act, 1961--Clarification regarding
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Discount on money-market instruments treated as non-interest, so tax-at-source under section 194A not applicable to Commercial Papers, Certificates of Deposit. The difference between issue price and face value of Commercial Papers and Certificates of Deposit is to be treated as discount allowed and not as interest; therefore, the provisions relating to deduction of tax at source under section 194A are not applicable to transactions in these instruments.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Discount on money-market instruments treated as non-interest, so tax-at-source under section 194A not applicable to Commercial Papers, Certificates of Deposit.
The difference between issue price and face value of Commercial Papers and Certificates of Deposit is to be treated as discount allowed and not as interest; therefore, the provisions relating to deduction of tax at source under section 194A are not applicable to transactions in these instruments.
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