Notification 5 October 1964
Notification No. 3673
An exemption granted under section 10 of the Income-tax Act, 1961
What this is
Notification No. 3673 was published on 5 October 1964. Its subject is An exemption granted under section 10 of the Income-tax Act, 1961.
This grants an exemption or a relief under a provision that allows one. Read the conditions attached: an exemption notification is construed strictly, and a condition missed is the exemption lost.
What it does
The notification, made under paragraph (b) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961, accords approval to the Banque Francaise du Commerce Exterieur, Paris. The approval is for the purposes of exemption from tax on the interest payable by an industrial undertaking in India on moneys borrowed by it under a loan agreement entered into with that foreign financial institution.
Who it reaches
- Banque Francaise du Commerce Exterieur, Paris
- industrial undertakings in India borrowing from that institution
- payers considering deduction of tax at source on such interest
- assessing officers examining a claim of exempt interest
The provisions it speaks to
Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.
The instrument, as the Board published it
The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.
In exercise of the powers conferred by paragraph (b) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby accords approval to the Banque Francaise du Commerce Exterieur, Paris, for the purposes of exemption from tax on the interst payable by any industrial undertaking in India on moneys borrowed by it under a loan agreement entered into with the said foreign financial institution
What to watch
- The approval attaches to the lender, so the exemption depends on the moneys having been borrowed under a loan agreement with this named institution.
- The borrower must be an industrial undertaking in India; a borrower of another description is outside the exemption.
- The notification as available states no date from which the approval operates and names no particular loan agreement.
Where you meet it
A reader meets this where interest paid to this institution by an Indian industrial undertaking is claimed to be exempt under section 10(15), and in the question whether tax was to be deducted from it.
On the same provision
Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.
What a notification is. A notification is made under a power the Act itself gives, and within that power it is law — unlike a circular, which only binds the department. Its reach is the reach of the enabling provision and no wider, and the date it carries decides from when it works.
Source: the Income Tax Department’s own published text — its page for this instrument.