Interest

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....he interest, the tax so charged shall not exceed 10 per cent. of the gross amount of the interest.] 3. Notwithstanding the provisions of paragraph 2: (a) interest arising in a Contracting State shall be exempt from tax in that Contracting State provided it is derived and beneficially owned by: (i) the Government, a political sub-division or local authority of the other Contracting State; or ....

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....ther Contracting State in charge of the public financing of external trade. 4. The term "interest" as used in this article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from Government securities and income from bonds or debentures, including premiu....

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....to arise in a Contracting State when the payer is that Contracting State itself, a political subdivision, 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 interes....

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.... provisions of this Convention. ************** NOTES:- 1. Substituted vide Notification No. 650(E) dated 10-07-2000 w.e.f. 01-04-1995 2. Substituted vide Notification No. 650(E) dated 10-07-2000 w.e.f. 01-04-1997 before it was read as, "1[2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the recip....