Foreign exchange loss

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pardeep jindal (Querist)
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26 May 2015 What should be the treatment of foreign exchange loss on long term loans taken (not for acquiring asset) .

and is this loss allowed as expenses in income tax act

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 May 2015 Charge off the loss to P&L account.
Foreign Exchange Fluctuations on Revenue Account means on debtors of export, creditors for expenses payable abroad, then the foreign exchange fluctuations gains shall be taxable under the head of Profits and Gains of business or profession.
Similarly, the foreign exchange fluctuations loss is deductible under section 37(1) while computing the income under the head “Profits and Gains of business or profession”.
These foreign exchange fluctuations shall be taxable/deductible on accrual basis if the assessee is following accrual system of accounting.

Rupesh Jain

Rupesh Jain (Expert)
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26 May 2015 its debit to profit & loss a/c

Rupesh Jain

Rupesh Jain (Expert)
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26 May 2015 YOU HAVE TO DEBIT PROFIT & LOSS A/C

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