INTEREST ON FOREIGN BORROWINGS VIA CONVERTIBLE BONDS UNDER TDS NET

Interest paid by domestic entities to foreign companies in respect of borrowing through convertible
bonds is liable for tax deduction at source (TDS). The Authority for Advance Ruling (AAR) on Income Tax has held that TDS provisioning has to be made in respect of interest paid by Indian companies towards borrowings made by issuing convertible bonds under the foreign investment schemes