Foreign interest deduction from house property income depends on tax compliance and an Indian agency requirement. Interest chargeable to tax and payable outside India is disallowed as a deduction from income from house property unless tax has been paid or deducted at source and the prescribed Indian agency condition is satisfied. The earlier rule stated the same principle in substance, allowing such foreign interest only where tax had been paid or deducted at source and a person in India could be treated as the recipient's agent.