Foreign Exchange fluctuations on depreciation

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kiran (Querist)
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28 February 2020 Dear All,
Please help with the following question quoting the relevant sections and provisions:-
A Ltd. imported a capital asset into India on 24th February, 2020 for 10000 USD when the exchange rate was Rs. 70/USD. The company made the payment on 25th May, 2020 when the exchange rate was Rs. 72/USD. Compute the depreciation under IT Act for A.Y 2020-21 & A.Y 2021-22 assuming the rate of depreciation as per Rule 5 is 15%. The exchange rate as on 31st March, 2020 is Rs. 68/INR.
Will the answer change:
a) if the payment was made on 25th November, 2020?
b) if the rate of exchange as on date of payment was Rs. 65/USD & as on 31st March, 2020 was Rs. 73/USD?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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04 June 2020 https://taxguru.in/income-tax/deductibility-foreign-exchange-fluctuations-case-capital-assets.html
https://taxguru.in/income-tax/treatment-exchange-fluctuation-income-tax-laws.html
https://home.kpmg/content/dam/kpmg/pdf/2016/06/tnf-india4-june-7-2016.pdf
https://cleartax.in/s/as-11-foreign-exchange-rates-effects
https://www.mca.gov.in/Ministry/notification/pdf/AS_11.pdf
http://www.incometaxparaskochar.com/Image/aghore.pdf

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