Applicability of Withholding tax

[CA.ANCHAL RASTOGI]

1. A Indian Bank “A” arrange buyers credit for a Indian company “B” through its overseas branch. My question as follows: Whether withholding tax is applicable on interest payment by “B” to overseas branch of Indian Bank on maturity of buyers credit? 2. A Indian Bank “A” arranges buyers credit for a Indian company “B” through overseas branch of a foreign bank My question as follows: Whether withholding tax is applicable on interest payment by “B” to overseas branch of foreign Bank on maturity of buyers credit?

[Rama Krishana]

I believe you question is not so simple. It is highly dependent on determination of one question that whether such interest payable on maturity of credit is taxable in India. A detailed brainstorming is required.

[Anuj Gupta]

The answer of first query is NO and for the second query is YES.