IT/ILT : The arm's length interest rate for loan to overseas subsidiary should be computed based on the market determined interest rate applicable to the currency concerned in which the loan has to be repaid. Interest rates should not be computed on the basis of interest payable on the currency or legal tender or the place or country of residence of either party. There is no justification or cogent reason for applying PLR which is applicable to loans in Indian rupee for outbond loan from Indian
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