DISCOUNTING INCOME FROM PROMISSORY NOTE AGREEMENT IS EXEMPTED.

Where applicant, a US company, enters into a discounting agreement with an Indian company for purchase of promissory note and makes remittance of purchase price (i.e. face value minus discounting charges) in India, income arising from discounting of promissory note is business income of applicant; but having regard to fact that applicant does not have a permanent establishment in India, discounting income so received would not be taxed in India by virtue of article 7 of Indo-US DTAA