HC Deb 25 May 1886 vol 306 cc30-1
MR. KING (Hull, Central)

asked the Under Secretary of State for India, Whether it is the case that holders of Government of India Promissory Notes, commonly called rupee paper, resident in Great Britain, are charged not only the Income Tax in Great Britain, but also the Indian Income Tax, the two combined making a charge of one shilling and two pence in the pound; and, whether, in view of the fact that rupee paper is largely held in Great Britain, and the imposition of a double Income Tax is calculated to impair its desirability as an investment and to diminish the credit of the Indian loans in the English market, steps will be taken to relieve these loans from the double imposition in question?


By the Indian Income Tax Act the holder of Government of India promissory notes—whose income is not less than Rs. 2,000 a-year—is liable to a tax on the interest thereon of five pies in the rupee, equal to 6¼d. in the pound. This, added to the 8d. English Income Tax, gives a total charge of 1s.d. in the pound. As to the second part of the Question, it must be remembered that the interest on rupee loans is only payable in India, and that the Bank of England, when drawing in London bills on India for the payment of interest on enfaced paper, is merely acting as the agent in London of the Government of India. The Indian Income Tax Act makes no exception as to the place of residence of the person receiving interest payable in India on rupee loans, and there is no intention of making any such alteration of the Act as will exempt residents in this country.