Computation of capital gains in case of foreign investment


Hi friends ,

One of my clients Invested in Equity shares of a foreign company @ 1$/Share and after four years disposed the same at 1$/share .the gain or loss that arised is only because of forex difference . my doubt is to whether to treat such forex difference as capital gain or not ...?

 

 

Replies (1)
yes as per law it should be considered. For taxation purpose, transaction is converted to INR amount as per exchange rate on day of transaction. You are effectively paying tax on forex gains in this case.

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