Chidambaram lowers taxes on overseas borrowings

http://businesstoday.intoday.in/story/chidambaram-lowers-taxes-on-overseas-borrowings/1/188286.html

The government on Friday reduced tax on overseas borrowings by domestic companies to 5 per cent from 20 per cent so that local companies could easily raise funds abroad.

Finance Minister P. Chidambaram said the reduced tax rate will be applicable to the funds borrowed between July 2012 and June 2015.

This lower rate of taxation will apply to interest paid to a non-resident by an Indian company for money borrowed in foreign currency from a source outside India, either under a loan agreement or by way of long-term infrastructure bonds.

Chidambaram said appropriate amendments would be made in the Income Tax Act, 1961, under which the interest income of a non-resident investor will be taxed at the reduced rate.