Section B (2 Mark)
As per Article 11 double Taxation Avoidance Agreement with US Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed:
(a) ____per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution (including an insurance company); and
(b) _____ per cent of the gross amount of the interest in all other cases.
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