RBI Export Credit Subsidy Not Taxable as Interest: Bombay HC

Bank of India Vs DCIT (Bombay High Court) In a significant ruling for the banking sector, the Bombay High Court has declared that the Export Credit (Interest Subsidy) Scheme, 1968, subsidy received by banks from the Reserve Bank of India (RBI) cannot be treated as ‘interest’ chargeable under Section 4 of the Interest Tax Act, 1974. This decision, stemming from an appeal filed by Bank of India against the Deputy Commissioner of Income Tax (DCIT) for the assessment year 1992-93, overturns previous rulings by tax authorities and the Income Tax Appellate Tribunal (ITAT). The case revol...