Residential status and type of income

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Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2012 Case 1 : A(NR)gives loan to B(R). He invests it in shares in India. Interst income of A is accruring/arising in India.

Case 2: C(NR)gives loan to D(NR). He invests in shares in India. Interest income of C is accruring/arising abroad.

Whats the difference b/w the 2 cases?

Amol S Joglekar

Amol S Joglekar (Expert)
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16 August 2012 CASE 1: The loan agreement will decide the taxability. Loan given for specific purpose of investing in shares in Indian companies shall definitely attract Indian Tax on the interest earned. CASE2: subject to VODAFONE case stand, this will accrue out of India... Again the purpose of loan shall play a deciding role. In normal case of LOAN, it will accrue out of India.

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