Interest

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....sp;the Government, a political sub-division or local authority of the other Contracting State; or ^3[(ii) the "Reserve Bank of India" in the case of India and the "Banque de France" and "Agence Francaise de Developement" in the case of France; or] (iii) any other institution as may be agreed from time to time between the competent authorities of the Contracting States; (b) interest arising in a Contracting State shall be exempt from tax in that Contracting State if it is beneficially owned by a resident of the other Contracting State and is derived in connection with a loan or credit extended or endorsed by : (i) in the case of France, the Banque Francaise du Commerce Exteriur, or the Compa....

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.... a local authority or a resident of that Contracting State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. 7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exc....