Rate of exchange for foreign Salary
This query is : Resolved
09 June 2010
If a preson getting salary in foreign exchange and he is assessable in india then at what rate of exchange salary is converted in indian currency for income tax purpose ??????
09 June 2010
The RBI's reference rate on the date of receipt salary may be taken for conversion.
More opinion solicited.
More opinion solicited.
19 July 2025
Exchange Rate for Foreign Salary – Income Tax in India
If a person earns salary in foreign currency and is assessable in India (i.e., resident or otherwise taxable on global income), the salary must be converted into INR for tax purposes.
✅ Applicable Exchange Rate for Income Tax (As per Rule 115 of the Income Tax Rules, 1962):
The rate of exchange to be used is the "telegraphic transfer buying rate (TT buying rate)" of the last day of the month immediately preceding the month in which the income is due or received.
📘 Definitions:
TT Buying Rate: The rate at which a bank buys foreign currency from you by telegraphic transfer (same as inward remittance).
This rate is published by State Bank of India (SBI) and used for tax purposes.
🔎 Example:
Suppose you received foreign salary for June 2010.
You must use SBI TT Buying Rate as on 31st May 2010 to convert your salary into INR.
🧾 Where to Find These Rates?
SBI publishes monthly exchange rates for tax purposes on its website.
Alternatively, professional tax tools and Chartered Accountants may provide historical rates.
🚨 Important Notes:
This rule applies only for taxation purposes, not accounting under Companies Act.
You must maintain documentation like payslips and conversion sheets.
If a person earns salary in foreign currency and is assessable in India (i.e., resident or otherwise taxable on global income), the salary must be converted into INR for tax purposes.
✅ Applicable Exchange Rate for Income Tax (As per Rule 115 of the Income Tax Rules, 1962):
The rate of exchange to be used is the "telegraphic transfer buying rate (TT buying rate)" of the last day of the month immediately preceding the month in which the income is due or received.
📘 Definitions:
TT Buying Rate: The rate at which a bank buys foreign currency from you by telegraphic transfer (same as inward remittance).
This rate is published by State Bank of India (SBI) and used for tax purposes.
🔎 Example:
Suppose you received foreign salary for June 2010.
You must use SBI TT Buying Rate as on 31st May 2010 to convert your salary into INR.
🧾 Where to Find These Rates?
SBI publishes monthly exchange rates for tax purposes on its website.
Alternatively, professional tax tools and Chartered Accountants may provide historical rates.
🚨 Important Notes:
This rule applies only for taxation purposes, not accounting under Companies Act.
You must maintain documentation like payslips and conversion sheets.
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