14 October 2013
A company import Plant and machinery. Company had paid advance to Supplier @ 55 per dollar on 12-05-12. P&M received and installed on 01-01-13 and that day Rate were Rs 60 per dollar. In this transaction any Exchange difference will arise . If yes than what is treatment in income tax.
Foreign exchange difference treatment will accounted in the books of account only when you purchase the asset on credit basis.In your case amount already paid in advance,so accordingly there wont any treatment for exchange difference.
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