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Exemption from WithhoLding Tax

Interest payable by an industrial undertaking in India (related to ECBs, as approved by Government  RBI), would be eligible for taX  exemptions as per Section l005Xiv)(b), (d) to (g) of the

Income Tax Act, 1961. Exemptions under Section HXI 5 Xiv)(b), (d) to (g) are granted by the   Department of Economic Affairs while  xemption under Section 10(115 Xiv(c) is granted by the  Department of Revenue, Ministry of Finance. .

Approval Under FEMA

After receiving approval from the ECB Division, Department of Economic Affairs (DEA), Ministry of  Finance, the applicant is required to  btain approval from the RBI under the Foreign Exchange  Management Act, and to submit an executed copy of the loan agreement to the  EA for taking the  same on record, before obtaining the clearance for drawing the loan from the. RBI. Monitoring of the end-use of ECBs  ontinues to be done by the’ RBI.  At present, ECB approvals under USD SO million (automatic route) is given by the RBI under all the ECB   chemes except structured obligations. which .are at present being administered by the DEA. All other proposals are processed by the DEA.

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