Section 878 — Income Tax Act 2007: Interest paid by banks

Interest paid by banks 878 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. 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.