17. Interest on securities:-

(1)   The following income shall be chargeable under the head "Interest on securities", namely:-

(a)    interest on any securities of the Federal Government or a Provincial Government receivable by an assessee in any income year; and

(b)    interest on debentures or other securities for money issued by, or on behalf of, a local authority or a Pakistani company receivable by an assessee in any income year.

(2)   Notwithstanding anything contained in sub-section (1),-

(a)    where any security of the Federal Government is issued with the condition that the interest thereon shall not be liable to tax, the interest receivable on such security shall be exempt from tax in accordance with such condition; and

(b)    tax payable on the interest receivable on any security of a Provincial Government issued with the same condition as aforesaid shall be payable by that Provincial Government.