Report No. 12
21. Amounts not deductible.-
Notwithstanding anything contained in sections 19 and 20 [sections regarding deductions and banking company], the following amounts shall not be deducted in computing the income chargeable under the head "Interest on securities"-
(i) interest chargeable under this Act which is payable outside India (not being interest on a loan issued for public subscription before the 1st day of April, 1938) on which tax has not been paid or deducted under section 202 or 204 [section 18] and in respect of which there is no person in India who may be treated as an agent under section 173 [section 43];
(ii) sums expended by the assessee for the purpose of realising interest on securities on which no income-tax is payable under section 87(i) or 87 (ii) [section 8 provisos 2 and 3];
(iii) interest payable on money borrowed for the purpose of investment in securities, being securities on the interest on which no income-tax is payable under section 87(i) or 87(ii) section 8, provisos 2 and 3].
[Section 8, 1st proviso, latter part] C. Income from house property