TREATMENT OF FOREIGN ASSET UPON REDEMPTION ON RESIDENT STATUS

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This query is : Resolved

K.V. Raamachandran (Querist)
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23 June 2023 AS A NRE I INVESTED USD 10,000 IN AN INVESTMENT PRODUCT ON 22 JAN 2018. I RETURNED TO INDIA ON 22 JAN 2019. FOR FY2018-2019 I FILED MY IT RETURN AS A NRE; AND FOR FY2019-2020 & FY2020-2021 I FILED MY IT RETURNS AS 'RESIDENT NOT ORDINARY RESIDENT' I.E. RNOR STATUS. FOR FY2021-2022 I FILED MY IT RETURN AS A RESIDENT. DURING ALL THESE PERIODS I HAVE DISCLOSED THE INVESTMENT AS A FOREIGN ASSET IN MY IT RETURNS.

THE INVESTMENT WAS REDEEMED ON 22 AUGUST 2022 AND THE SALE PROCEEDS OF USD 11,700 CONVERTED AT 78.09 I.E. RS. 9,13,653 WAS RECEIVED IN MY RESIDENT ACCOUNT IN RS.

ON 1ST APRIL 2021 WHEN MY TAX STATUS CHANGED TO RESIDENT FROM RNOR THE INVESTMENT VALUE WAS USD 12,320; WHICH WHEN CONVERTED AT TT BUYING RATE OF 72.5 STOOD AT RS. 8,93,200.

AS CAN BE SEEN FROM ABOVE THERE IS A USD FALL IN VALUE OF INVESTMENT WHEN COMPARED TO THE VALUE AT THE START OF FILING AS A RESIDENT I.E. 12,320 LESS 11,700 I.E. USD 620; AND AT THE SAME TIME THERE IS AN EXCHANGE GAIN ELEMENT ALSO WITH THE RATE GOING UP FROM 72.50 TO 78.09.

APPRECIATE THE APPROPRIATE TAX TREATMENT ADVISE ON THE ABOVE FOR FY2022-2023.