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Loss on Foreign Currency Loan

Ramachandra (service) (36 Points)

14 November 2007

I have some queries regarding income tax

Whether Loss on Foreing Currency Loan on Capital Payment is a capital loss or revenue loss ?

Forward Contract income is revenue income or capital gain ?

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5 Replies

Indira Singh (Chartered Accountant) (87 Points)
Replied 14 November 2007

HI Loss on foreing currency loan on capital payment is a capital loss. Forward contract is done for three months period so the gain aur loss arises through this is revenue gain and not capital one.

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Ramachandra (service) (36 Points)
Replied 14 November 2007

Thanks for the information

Vijay K. Agrawal (Service) (608 Points)
Replied 14 November 2007

See 43A of income tax . if related to capital assets it will be added or deducted in cost of assets.

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 14 November 2007

LOSS OR PROFIT exchange fluctuation on foreing currency loan on a capital has to be adjusted to capital asset. And for depreciation purpose the same shall be considered before charging depreciation (ADD to Deletion)