Reporting Gross Foreign Income or INR Converted Income (After Steep Conversion) for Taxation

thethinker (Individual) (34 Points)

29 July 2024  

I receive income from foreign clients through PayPal. The issue is that PayPal has its own set of charges and higher conversion rates.

If I receive $1000 from the foreign client, and Telegraphic rates is 83, than Paypal might give me rate of 80.

Now, for the purpose of taxation, what should I report for taxation?

  1. Should I report Foreign Income in USD multiplied by the Telegraphic rate on that date?

  2. OR should I report the exact INR that I received in my bank account?

The problem is that Paypal does not give any receipt for steep conversion rates, and it is a loss for me if I go with Option 1 of the telegraphic rate as there is no receipt to write it off as a business expense.

One more problem is that foreign client deducts 1% TDS and it is reported in my AIS. And they apply conversion rate that is more higher than TT rates :(

What can be done in this case?