Revenue Note for Guidance
(1) & (2) The favourable treatment of interest outlined in section 36 applies in respect of any interest on the securities specified in the Table to this section (that is, interest paid on such securities may be paid without deduction of tax at source). The interest, however, then becomes chargeable to tax under Case III of Schedule D in the hands of the recipient. (The Case III Schedule D charge is removed in certain cases – see sections 47 and 49.)
(3) Subject to Part 35D, such interest paid by any of the companies listed in the Table is allowable as a deduction in computing the profits or gains of the company assessable to tax under Schedule D.
Relevant Date: Finance Act 2021