TaxTMI 
TaxTMI 
Interest
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....ontracting State and is the beneficial owner of the interest, the tax charged in the Contracting State in which the interest arises shall not exceed 10 per cent of the gross amount of the interest; (b) where the interest is paid to the Government of one of the Contracting States or a political subdivision or local authority of that State or the Reserve Bank of India, it shall not be subject to tax by the State in which it arises. 4. Notwithstanding the provisions of Article 7 of this Convention and of paragraphs (2) and (3) of this Article: (a) interest arising in India which is paid to and beneficially owned by a resident of the United Kingdom shall be exempt from tax in India if it is paid in respect of a loan made, g....
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....t-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 (Business profits) or Article 15 (Independent personal services) of this Convention, as the case may be, shall apply. 7. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that 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 that pe....
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....if the beneficial owner of the interest: (a) is exempt from tax on such income in the Contracting State of which he is a resident; and (b) sells or makes a contract to sell the holding from which such interest is derived within three months of the date such beneficial owner acquired such holding 11. The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to take advantage of this Article by means of that creation or assignment.^[1] FOOTNOTES: - 1. India understands that the UK considers that paragraph 1 of Article 7 of the MLI replac....