Foreign Exchange Fluctuation related to capital Asset

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2011 Effect of Foreign Exchange Fluctuation as per 43A on actual payment of foreign exchange liability is addition or subtraction from WDV of the block of asset and effect of foreign exchange fluctuation for the same asset on 31st mar.will be-not taxable in case of gain and not deductible in case of loss,am i right?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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09 January 2011 As per AS11, ERV gain or loss to be transferred to P/L A/c. So it will be adjusted with profit. It will not affect WDV of the assets.

Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2011 Thank you sir.you mean treatment of foreign ex.fluctuation relating to capital asset on 31st mar.-gain/loss-will be capital receipt-so not taxable and will be capital loss so not deductible in PGBP????

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