Finance Act, 1974
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Restriction of sections 433 and 434 of Income Tax Act, 1967. |
50.—(1) Subject to the provisions of subsection (2) and sections 30 and 31 , sections 433 and 434 of the Income Tax Act, 1967 , so far as they relate to interest of money, shall not apply to any such interest in respect of any period beginning on or after the 10th day of January, 1974. | |
(2) Subsection (1) shall not apply to interest on any loan secured by an instalment promissory note signed before the 6th day of April, 1974, under the terms of which the borrower promised to make periodic payments which include a sum representing interest after deduction of income tax therefrom at the rate for the time being in force. | ||
(3) In subsection (2) “interest” means— | ||
(a) in the case of a loan the terms of which provide for the payment of interest “less tax” or use words to that effect, the interest which would be payable if the words “less tax” or the equivalent words were not included, and | ||
(b) in the case of a loan the terms of which provide for the payment of interest at such a rate (subsequently referred to as the gross rate) as, after deduction of tax at the rate for the time being in force, is equal to a stated rate, interest at the gross rate. | ||
(4) Payments of such interest as is referred to in subsection (2) in respect of any period beginning on or after the 10th day of January, 1974, shall be deemed to be payments not made out of profits or gains brought into charge, whether or not they are such payments, and subsections (2) to (5) of section 434 of the Income Tax Act, 1967 , shall apply to the said payments as they apply to payments specified in subsection (1) of that section. |