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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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DT Agreements: India - Income from a UK source paid to a resident of India

UK interest paid to a resident of India (Article 12)

UK interest paid to a resident of India who is the beneficial owner of the interest istaxable in the UK at 15%. However, UK interest paid to a bank carrying on a bona fidebanking business that is resident in India and is the beneficial owner of the interest istaxable in the UK at 10%.

Full relief from UK income tax is available on UK interest paid to:

  • the Government of India
  • a political subdivision or local authority of India
  • the Reserve Bank of India

No relief is available where the beneficial owner of the interest is exemptfrom tax in India and sells or makes a contract to sell the holding from which theinterest is derived within 3 months of the date the holding was acquired.