135. Arrangements for payment of fixed net amount.

If provision is made for the payment of interest, and that interest is payable without deduction of a sum representing income tax1, then:

  1.  

    (1)     if the provision is for the payment of interest 'less tax' (or uses words to similar effect) it is to be read as if those words were not included; and

  2.  

    (2)     if the provision is (however worded) for the payment of specified interest to be paid at such a rate (the 'gross rate') that the amount of interest payable at that rate is, after deduction of a sum representing income tax, equal to the amount