Income Tax Act, 2025
Section 10: Ins. by Act 3 of 1989, s. 4 (w.e.f. 11989).
10. Ins. by Act 3 of 1989, s. 4 (w.e.f. 11989).
78
Provided also that in a case where the bonds are encashed in a previous year prior to their
maturity by an individual who is so entitled, the provisions of this sub-clause shall not apply to such
individual in relation to the assessment year relevant to such previous year:
1[Provided also that the Central Government shall not specify, for the purposes of this sub-clause,
such bonds on or after the 1st day of June, 2002.]
Explanation.—For the purposes of this sub-clause, the expression “non-resident Indian” shall
have the meaning assigned to it in clause (e) of section 115C;]
(iii) interest on securities held by the Issue Department of the Central Bank of Ceylon constituted
under the Ceylon Monetary Law Act, 1949;
2[(iiia) interest payable to any bank incorporated in a country outside India and authorised to
perform central banking functions in that country on any deposits made by it, with the approval of the
Reserve Bank of India, with any scheduled bank.
Explanation.—For the purposes of this sub-clause, “scheduled bank” shall have the meaning
assigned to it in 3[clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36];]
4[(iiib) interest payable to the Nordic Investment Bank, being a multilateral financial institution
constituted by the Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan
advanced by it to a project approved by the Central Government in terms of the Memorandum of
Understanding entered into by the Central Government with that Bank on the 25th day of November,
1986;]
5[(iiic) interest payable to the European Investment Bank, on a loan granted by it in pursuance of
the framework-agreement for financial co-operation entered into on the 25th day of November, 1993
by the Central Government with that Bank;]
(iv) interest payable—
6[(a) by Government or a local authority on moneys borrowed by it before the 1st day of
June, 2001 from, or debts owed by it before the 1st day of June, 2001 to, sources outside India;]
(b) by an industrial undertaking in India on moneys borrowed by it under 7[a loan agreement
entered into before the 1st day of June, 2001 with any such financial institution] in a foreign
country as may be approved in this behalf by the Central Government by general or special
order;
(c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it
8[before the 1st day of June, 2001] in a foreign country in respect of the purchase outside India of
raw materials 9[or components] or capital plant and machinery, 10[to the extent to which such
interest does not exceed the amount of interest calculated at the rate approved by the Central
Government in this behalf, having regard to the terms of the loan or debt and its repayment.]
9[11[Explanation 1.]—For the purposes of this item, “purchase of capital plant and machinery”
includes the purchase of such capital plant and machinery under a hire-purchase agreement or a lease
agreement with an option to purchase such plant and machinery.]
of section 115C;]
interest on securities held by the Issue Department of the Central Bank of Ceylon constituted
under the Ceylon Monetary Law Act, 1949;
2[
interest payable to any bank incorporated in a country outside India and authorised to
perform central banking functions in that country on any deposits made by it, with the approval of the
Reserve Bank of India, with any scheduled bank.
Explanation.—For the purposes of this sub-clause, “scheduled bank” shall have the meaning
assigned to it in 3[clause
of the Explanation to clause
of sub-section
of section 36];]
4[
interest payable to the Nordic Investment Bank, being a multilateral financial institution
constituted by the Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan
advanced by it to a project approved by the Central Government in terms of the Memorandum of
Understanding entered into by the Central Government with that Bank on the 25th day of November,
1986;]
5[
interest payable to the European Investment Bank, on a loan granted by it in pursuance of
the framework-agreement for financial co-operation entered into on the 25th day of November, 1993
by the Central Government with that Bank;]
interest payable—
6[
by Government or a local authority on moneys borrowed by it before the 1st day of
June, 2001 from, or debts owed by it before the 1st day of June, 2001 to, sources outside India;]
by an industrial undertaking in India on moneys borrowed by it under 7[a loan agreement
entered into before the 1st day of June, 2001 with any such financial institution] in a foreign
country as may be approved in this behalf by the Central Government by general or special
order;
by an industrial undertaking in India on any moneys borrowed or debt incurred by it
8[before the 1st day of June, 2001] in a foreign country in respect of the purchase outside India of
raw materials 9[or components] or capital plant and machinery, 10[to the extent to which such
interest does not exceed the amount of interest calculated at the rate approved by the Central
Government in this behalf, having regard to the terms of the loan or debt and its repayment.]
9[11[Explanation 1.]—For the purposes of this item, “purchase of capital plant and machinery”
includes the purchase of such capital plant and machinery under a hire-purchase agreement or a lease
agreement with an option to purchase such plant and machinery.]