New Delhi, Sep 21 (IANS): The government Friday reduced tax on overseas borrowings by domestic companies to five percent from 20 percent 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.