Treatment of exchange fluctuatation loan

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DIMPLE GARG (Querist)
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09 January 2013 Dear sir,

I have a query that my uncle take a loan for his business for purchase of goods but at the time of payment the dollar rate was increase and he suffer some fluctuation loss now I want to know how should we treat this loss ? whether too show this as revenue loss or capital loss ?and can we adjust this loss against the future exchange profit?please reply

kartik_somu

kartik_somu (Expert)
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09 January 2013 there is no classification as revenue or capital with respect to forex loss, except in the case of purchase of qualifying capital asset, the forex loss to the extent of difference in interest rates can be capitalised. it can very well be adjusted against exchange profit

DIMPLE GARG

DIMPLE GARG (Querist)
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09 January 2013 sir in our case purchase of business goods can we treated the loss as capita

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