Smart Inc., Country X, advanced USD 10 million on 1.06.2023 to Kite (P) Ltd., India, in foreign currency. Kite (P) Ltd accepted the loan amount…
CA Final · Direct Tax Laws and International Taxation · MTP · November 2024
Smart Inc., Country X, advanced USD 10 million on 1.06.2023 to Kite (P) Ltd., India, in foreign currency. Kite (P) Ltd accepted the loan amount under an agreement approved by the Central Government of India. The loan carries interest@9% per annum payable in foreign currency. For the financial year 2023-24, Kite (P) Ltd paid interest after deducting income-tax on 31.03.2024. The TT buying rates on 01.06.2023 is 1 USD = 69; on 31.03.2024 is 1 USD = 70. What is the income-tax liability of Smart Inc. in India for the assessment year 2024-25 in respect of interest income earned in foreign currency from Kite (P) Ltd?
Suggested Answer and Working Notes:
Correct Answer: Option (D)
₹ 27.846 lakhs
Topics: Double Taxation Relief, Non-Resident Taxation
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