834 INCOME TAX From foreign corpo- rations . Other individuals, etc . Of unknown owners. Exception on notice of credit withheld by individual . Nonresident alien in- dividual . Post, p. 848. Lower rate on notice of income not exceeding $4,000 . Restriction on obligor and obligee. Normal tax of non- resident aliens payable at source . Exceptions . Ante, p. 802 . Post, p . 848. Proviso . Interest of unknown o wners includ ed . Returns, etc., by withholding agent re- q uired . Ante, p . 809. SEVENTIETH CONGRESS . SESS . I. CH. 852 . 1928 . any partnership not engaged in trade or business within the United States and not having any office or place of business therein and composed in whole or in part of nonresident aliens, (B) 12 per centum in the case of such a foreign corporation, and (C) 2 per centum in the case of other individuals and partnerships : Provided further, That if the owners of such obligations are not known to the withholding agent the Com- missioner may authorize such deduction and withholding to be at the rate of 2 per centum, or, if the liability assumed by the obligor does not exceed 2 per centum of the interest, then at the rate of 5 per centum . (2) BENEFIT OF CREDITS AGAINST NET INCOME.-Such deduc- tion and withholding shall not be required in the case of a citizen or resident entitled to receive such interest, if he files with the withholding agent on or before February 1 a signed notice in writing claiming the benefit of the credits provided in section 25(c) and (d) ; nor in the case of a nonresident alien individual if so provided for in regulations prescribed by the Commissioner under section 215 . (3) WITHHOLDING AT LOWER RATE .-Such deduction and with- holding shall be at the rate of 11/2 per centum instead of at the rate of 2 per centum in the case of a citizen or resident entitled to receive such interest if he files with the withholding agent on or before February 1 a signed notice in writing that his net income in excess of the credits against net income provided in section 25 does not exceed $4,000 . (4) INCOME of OBLIGOR AND OBLIGEE.-The obligor shall not be allowed a deduction for the payment of the tax imposed by this title, or any other tax paid pursuant to the tax-free covenant clause, nor shall such tax be included in the gross income of the obligee . (b) Nonresident aliens .-All person s, in whatever capacity acting, including lessees or mortgagors of real or personal property, fiduci aries, emplo yers, and al l offi cers an d empl oyees of the Unite d States, having the control, receipt, custody, disposal, or payment of interest (except interest on deposits with persons carrying on the banking business paid to persons not engaged in business in the United States and not having an office or place of business therein), rent , sal aries , wag es, premi ums, annu ities , com pens ation s, re mu- nerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, of any nonresident alien indi- vidual, or of any partnership not engaged in trade or business within the United States and not having any office or place of business therein and composed in whole or in part of nonresident aliens, (other than income received as dividends of the class allowed as a credit by section 25(a)) shall (except in the cases provided for in subsection (a) of this section and except as otherwise provided in regu lat ions pre scri bed by t he Comm issi oner und er sect ion 215) deduct and withhold from such annual or periodical gains, profits, and income a tax equal to 5 per centum thereof : Provided, That the Commissioner may authorize such tax to be deducted and with- held from the interest upon any securities the owners of which are not known to the withholding agent . (c) Return and payment .-Every person required to deduct and withhold any tax under this section shall make return thereof on or before March 15 of each year and shall on or before dune 15, in lieu of the time prescribed in section 56, pay the tax to the official of the United States Government authorized to receive it . Every such person is hereby made liable for such tax and is hereby indemnified
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