The Indian corporate will have to deduct the tax under section 195 if the loan was borrowed from non resident company and loan was utilised for any business carried out in India. This is on account of section 9

(v) income by way of interest payable by

(b) a person who is a resident, except where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or

Since that interest accrued in hand of non resident company is taxable in India , the payer is required to deduct tax at source.

What will be the rate?

Article 11 : Interest - 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State the tax so charged shall not exceed :

(a) 10 per cent of the gross amount of the interest, if such interest is paid on any loan of whatever kind granted by a bank; and

(b) 15 per cent of the gross amount of the interest in all other cases.

Procedure for availing such lower deduction?

Circular No. 553, dated 13-2-1990 was specific to the relief to Belgian resident under DTAA . The said circular stated as follows

I. RELIEF FROM INDIAN TAX TO THE BELGIAN RESIDENTS

In respect of dividends, interest, royalties and fees for technical services arising in India to a resident of Belgium, the payer of these incomes can deduct the tax at source at the reduced rates specified in article 10, 1 1 or 12 of the Agreement, as the case may be. The lower rate of tax will be applicable only if a certificate is granted by the concerned Belgian tax office that the beneficial owner of income is a resident of Belgium under article 4 of the Agreement. For this purpose, the Belgian resident will be required to obtain a certificate of residence from the Belgian tax office in Form No. 276, Conv. One copy of this form must be submitted to the concerned Assessing Officer and the second copy must be filed with the Indian payer of the income. The No Objection Certificate for the remittance of these items of income from India will be issued by the Assessing Officer only after tax has been deducted at source by the payer. If, for any reason, tax is deducted at source at the rate higher than that prescribed in the Agreement, a refund of the excess tax can be obtained by lodging an income-tax return with the concerned Income-tax/Assessing Officer as soon as possible and in any case before the expiry of a period of two years from the end of the relevant assessment year.

Can You Get Tax Relief in Belgium?

The DTAA has specific provision for giving credit of tax which is deducted in India from interest income accrued in India . The said article is as under ;

Article 23 : Elimination of double taxation - 1. The laws in force in either of the Contracting States will continue to govern the assessment and taxation of income in the respective Contracting States except where express provision to the contrary is made in this Agreement.

2…….
3. In the case of Belgium, double taxation shall be avoided as follows :

(a)………

(b) (i) Where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are dividends taxable in accordance with paragraph 2 of Article 10, and not exempt from Belgian tax according to sub-paragraph (c), interest taxable in accordance with paragraph 2 or 6 of Article 11, or royalties taxable in accordance with paragraph 2 or 6 of Article 12, the Indian tax levied on that income shall be allowed as a credit against Belgian tax relating to such income in accordance with the existing provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad.

There you are. It is under DTAA, that interest which was subject to TDS in India can be claimed as credit in Belgiun as per Article 23(b )of the DTAA between India and Belgium