Computation of capital gains in case of foreign investment

Tax queries 161 views 1 replies

eusuf

39 Points Joined December 2013

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)

neeraj gupta

1138 Points Joined March 2017

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.