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?

AI Summary

Clarification on Withholding Tax: Payments to Overseas Indian Bank Branch Exempt, Foreign Bank Branch Liable An individual raised a query about the applicability of withholding tax on interest payments by an Indian company to an overseas branch of an Indian bank and a foreign bank. Two responses were provided. The first responder suggested that the issue is complex and requires further analysis to determine if the interest is taxable in India. The second responder provided a straightforward answer: withholding tax does not apply to payments to the overseas branch of an Indian bank, but it does apply to payments to the overseas branch of a foreign bank.