Thursday, November 15, 2012

WITHHOLDING TAX ON FOREIGN BORROWINGS SLASHED

The rate of withholding tax has been slashed to 5 per cent from 20 per cent. The lower rate will be
applicable for overseas borrowings made after July 1, 2012 and before July 1, 2015. Borrowings
under a loan agreement or by way of issue of long- term infrastructure bonds that comply with
External Commercial Borrowings (ECB) regulations as administered by the Reserve bank
of India (RBI) would be eligible for benefits of the concessional tax regime.

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