The 60-second version
Section 194LC requires 5% TDS on interest paid to resident on foreign currency borrowing by Indian company — infrastructure and manufacturing bond lane.
194LC is FC borrowing interest — 194LD is listed infra bond
Section 194LC applies when an Indian company pays interest on foreign currency borrowing to a resident — 5% TDS deducted by payer.
Distinct from Section 194LD 5% on interest on rupee-denominated listed infrastructure bonds.
InvIT lane: Section 194LB guide.
Bond interest TDS matrix
| Section | Rate | Instrument |
|---|---|---|
| 194LC | 5% | FC borrowing by Indian co. |
| 194LD | 5% | Listed infra bond (INR) |
| 194F | 10% | Debenture interest |
| 193 | 10% | Government securities |
194LC sequence
Interest due
Company declares coupon.
5% TDS
Deducted at source.
26AS
Verify company TAN.
ITR
Declare interest income.
Form 67
If foreign bond overlap.
Flow
194LC kit
- Interest advice.
- TDS cert.
- 26AS.
- PAN.
- ITR ACK.
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vs 194LD
194LD is rupee listed infrastructure bond — 194LC is foreign currency borrowing.
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vs 194LD?
194LC FC borrowing; 194LD INR listed infra bond.
Masala bond?
INR-denominated offshore — verify which section applies.
RNOR?
Indian company interest taxed from resident date.
Form 15G?
If total income below exemption.
Foreign bond?
Schedule FA — not 194LC.
TDS refund?
Claim in ITR if tax due below TDS.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.