(5)(a)Income by way of interest payable by––(i)the Government;(ii)a resident, except where it is payable in respect of any debt incurred, or moneys borrowed and used, for the purpose of—(A) a business or profession carried on by such resident outside India; or(B) making or earning any income by such resident from any source outside India; or(iii)a non-resident, if it is in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such non-resident in India,shall be deemed to accrue or arise in India;(b)for the purposes of clause (a),––(i)any interest payable by the permanent establishment in India of a non-resident person engaged in the business of banking, to the head office or any other permanent establishment or any other part of such non-resident outside India shall be deemed to accrue or arise in India and shall be chargeable to tax in addition to any income attributable to such permanent establishment in India;(ii)such permanent establishment in India shall––(A) be deemed to be a person separate from, and independent of, the non-resident person of which it is a permanent establishment; and(B) the provisions of this Act relating to computation of total income, determination of tax and collection and recovery shall apply, accordingly;(iii)"permanent establishment" shall have the meaning assigned to it in section 173(c).
