Income Tax Act, 1967.

Funding bonds issued in respect of interest on certain debts.

475.—(1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on a debt to which this section applies, the issue of those bonds shall be treated for all the purposes of this Act as if it were the payment of an amount of the said interest equal to the value of the said bonds at the time of the issue thereof, and the redemption of the said bonds shall not be treated for any of the said purposes as payment of the said interest or any part thereof.

(2) This section applies to all debts owing by any government, public authority, or public institution whatsoever or wheresoever and to all debts owing by any body corporate whatsoever or wheresoever.

(3) In this section “funding bonds” includes all bonds, stocks, shares, securities, and certificates of indebtedness.