07 February 2011
One of our NRI client is planning to advance loan to a partnership firm in India. The sources of funds are from overseas. So the questions are: 1. Is any agreement required to be entered with the P. Firm in India for loan? 2. How loan can be advanced i.e. is there any restriction in India? 3. Is loan & interest thereon repatriable out of India? 4. Is TDS deductible on interest as the NRI have only this interest income? Is any declaration required to be filed by NRI for non-deduction of TDS?
09 February 2011
There are separate rules and regulations titled "External Commercial Borrowings" under FEMA for the same and they shall become applicable in the present case.
1. Answered above 2. same as above 3. subject to ECB guidelines 4. Yes , no declaration shall serve the purpose only option is to go to ITO for certificate of Nil or lower deduction.
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