169. Discounts.

All discounts are treated1 as interest, except for discounts in deeply discounted securities2. In this context 'discounts' has been interpreted as covering all profit on a security bought at a discount or a transaction involving a discount3. It is not a term of art, and relates to profits on all discounts from whomsoever made4. Any profit must, however, be an income profit5; consequently it does not apply to the discount or difference between the cash and credit prices of an article allowed by a seller6.

In order to be chargeable to income tax there must be a source of income