TDS on rupee denominated bond interest applies at a concessional rate for eligible non-resident recipients without threshold.

Tax deduction at source applies to interest on qualifying rupee denominated bonds issued before 1 July 2023 and paid by an Indian company or Business Trust to a non-resident other than a company or to a foreign company. The concessional deduction rate is 5%, subject to applicable surcharge, Health and Education Cess, and Double Taxation Avoidance Agreement relief. No threshold applies, and deduction occurs at the earlier of credit or payment. The concessional rate is available only for interest not exceeding the Central Government-approved rate.

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