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Unit 13: Income from Other Sources

(g) Interest payable by a scheduled bank to a non-resident or a person not ordinarily Notes
resident on deposits in foreign currency where the acceptance of such deposits by
the bank is approved by the Reserve Bank of India.
(h) Interest payable by a public company formed and registered in India, and eligible
for deduction under Section 36(1)(viii) with the main objective of carrying on business
of providing long term finance for construction or purchase of houses in India for
residential purposes on any moneys borrowed by it in foreign currency from sources
outside India under an approved loan agreement before the 1st day of June, 2003, to
the extent to which such interest does not exceed the amount of interest calculated at
the rate approved by the Central Government.
(i) Interest payable by public sector companies on certain specified bonds and debentures
subject to such conditions, including the condition that the holder of such bonds or
debentures registers his name and the holding with that company, as may be specified
by the Central Government by notification in the Official Gazette.
(j) Interest payable by Government on deposits made by an employee of the Central or
State Government, or a public sector company out of moneys due to him on account
of his retirement, whether on superannuation or otherwise. To be eligible for
exemption, the deposit must have been made by the employee in accordance with a
scheme notified by the Central Government.
(k) Interest on securities held by the Registrar, Supreme Court, in Reserve Bank’s SGL
Account No. SL/DHO48.

Self Assessment

Fill in the blanks:
15. ………………………………. is a document held by a creditor as guarantee of his right to
payment.

16. The word security denotes a debt or claim, the payment of which is in some way
……………………………….
17. For tax concession purposes securities does not include ………………………. in a company.

18. A mere …………………… is not a security.
19. Any …………………………… chargeable under the Income-tax Act which is payable outside
India and from which income-tax has not been paid or deducted at source shall not be
deducted in computing income chargeable under the head ‘Income from other sources’ in
the case of any assessee.
13.5 Assessee External to the Range of Tax Liability in Respect of

Interest on Securities

Where the securities are held by any of the following persons, interest thereon shall not be
included in their income for income-tax purposes:
1. Any authority constituted in India for the purpose of dealing with and satisfying the need
for housing accommodation or for the purposes of planning, development or improvement
of cities, towns and villages [Section 10(20A)].
2. Approved scientific research association [Section 10(21)].

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