Finance Act, 1995
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Amendment of section 8 (restriction of relief in respect of interest paid on certain loans at a reduced rate) of Finance Act, 1982. |
9.— Section 8 of the Finance Act, 1982 , is hereby amended, as respects the year 1995-96 and subsequent years of assessment, by the substitution in the definition of “the specified rate” (inserted by the Finance Act, 1989 ) in subsection (1) of— | |
(a) “7 per cent.” for “7.5 per cent.” (inserted by the Finance Act, 1994 ) in both places where it occurs, and | ||
(b) “11 per cent.” for “11.5 per cent.” (inserted by the Finance Act, 1994 ), | ||
and the said definition, as so amended, is set out in the Table to this section. | ||
TABLE | ||
“the specified rate”, in relation to a preferential loan, means— | ||
(i) in a case where— | ||
(I) the interest which is paid on the preferential loan qualifies for relief under section 76 (1) (c) or 496 of, or paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 , or | ||
(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified, | ||
the rate of 7 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, or | ||
(ii) in a case where— | ||
(I) the preferential loan is made to an employee by an employer, | ||
(II) the making of loans for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and | ||
(III) the rate of interest at which the employer in the course of his trade at the time the preferential loan is or was made makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence is less than 7 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, | ||
the first-mentioned rate in subparagraph (III), or | ||
(iii) in any other case, the rate of 11 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations. |