Part 15Deduction of income tax at source
Chapter 3Deduction from certain payments of yearly interest
Exceptions from duty to deduct
878Interest paid by banks
(1)
The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest made by a bank if that payment is made in the ordinary course of its business.
F1(1A)
But that duty does apply to such a payment if it is treated as a payment of yearly interest by virtue of section 874(5A).
(2)
Section 991 (meaning of “bank”) applies for the purposes of this section.