Expenses related to Capital Gain on share listed abroad

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Sumit Deb (Querist)
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19 July 2011 As part of Employee Share Purchase Plan, I made some STCG from sale of share listed on New York Stock Exchange. To encash the Dollar cheque of sale proceed, I incurred expenses on foreign currency conversion charge & cheque proccessing fee. Please let me know whether these expenses can be deducted while calculating STCG in this case.

CA Sachin D Jain

CA Sachin D Jain (Expert)
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20 July 2011 Dear Deb,

As per section 48 of the IT Act, 1961, "expenditure incurred wholly and exclusively in connection with such transfer" should be allowed as deduction from full value of consideration received or accruing as a result of transfer of capital asset. In your case, you have incurred expenses to repatriate the foreign receipt in India, which are not incurred wholly and exclusively in connection with sale of shares in New York Stock Exchange. Hence, in my opinion, such expenses would not be allowed to be deducted while calculation STCG in this case.

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Sumit Deb

Sumit Deb (Querist)
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20 July 2011 Hi Sachin,

Thanks for your satisfactory reply.

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