Foreign Exchange Fluctuation Loss whether deductable

VIPUL BUBNA (MANAGER TAXATION) (119 Points)

18 August 2009  

I have made the provision for Foreign Exchange Fluctuation Loss as on 31/03/2009 in profit and Loss A/c. for long term Foreign Currency Loan outstanding as per AS-11.

The Loan was taken for a Capital Project which is completed and and the Interest Cost is now expensed out.

Whether the Provision for Foreign Exchange Fluctuation Loss will be allowed as deduction in Income Tax?