IFSC bond interest withholding requires deduction by eligible payers, with concessional treatment limited to government-approved interest rates.

TDS applies to interest on overseas borrowings through long-term bonds or rupee denominated bonds listed exclusively on a recognised stock exchange in an IFSC. An Indian company or Business Trust must deduct tax when paying an eligible non-resident or foreign company, with no threshold exemption. The rate depends on the bond-issue date, and deduction occurs at the earlier of credit or payment. Concessional treatment is restricted to interest calculated at the Central Government-approved rate.

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