Section 194A(3)(i)(b) of the Income Tax Act

The exemptions provided under Section 194A(3) do not extend to interest payments made to cooperative societies, thereby requiring the deduction of tax at source on such payments.

Convertible debentures (CCDs) continue to be classified as debt until they are converted into equity. During the pre-conversion period, interest paid on CCDs is treated as interest on debt, not as interest on equity.

A co-operative society mentioned in Section 194A(3)(v) of the Income Tax Act should be interpreted as a co-operative society other than a co-operative bank.