Concessional withholding on rupee denominated bond interest applies to eligible non-resident recipients without any monetary threshold.

Section 393(2), Table Sl. No. 3, requires an Indian company or Business Trust to deduct tax at source on eligible interest paid or credited to a non-resident, other than a company, or a foreign company on rupee denominated bonds issued before 1 July 2023. Deduction is made at the earlier of credit or payment at a concessional rate of 5%, without a monetary threshold. The concessional rate applies only to interest not exceeding the rate approved by the Central Government, having regard to the bond or loan terms and repayment.

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