43. Taxation of foreign exchange fluctuation | Knowledge Bank

CHAPTER IV

COMPUTATION OF TOTAL INCOME

Profits and Gains of Business or Profession

Taxation of foreign exchange fluctuation

43. (1) Subject to the provisions of section 42, any gain or loss arising on account of change in foreign exchange rates on foreign currency transactions shall be treated as income or loss, as the case may be, and shall be computed as per the income computation and disclosure standards notified under section 276(2).

(2) The provisions of sub-section (1) shall be applicable to all foreign currency transactions, including those relating to—

(a) monetary items and non-monetary items;

(b) translation of financial statements of foreign operations;

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