can anyone tell me that whether notional exchange gain/loss arising on account of exchange rate adjustment on balance sheet is taxable????????????????if taxable then under which section????????????????????
ashish (article) (69 Points)
17 July 2010can anyone tell me that whether notional exchange gain/loss arising on account of exchange rate adjustment on balance sheet is taxable????????????????if taxable then under which section????????????????????
venkateswarlu.
(CA Final )
(118 Points)
Replied 17 July 2010
Yes, taxable as business income if it is arised during the business.
Madhusudan Kabra
(knowledge seeker)
(1779 Points)
Replied 17 July 2010
Yes, taxable as business income
deepak
(chartered accountant)
(31 Points)
Replied 17 July 2010
gain on revenue account is taxable under section 28 on accrual basis and in case of loss vice
versa however increase /decrease in cost of depriciable assest due to exchange fluctuation
is added /deducted in the block in the year of actual payament section 43A
deepak
(chartered accountant)
(31 Points)
Replied 17 July 2010
As per AS 11 the liability expressed in foreign currency at the close of the year has to be increasec/decreased based on the rates prevailing at the close of the year when corresponding increase decrease has to be affected in value of assets the amendment of section 43A provides for increase decrease in currency fluctuation at the time of payament.This will have a major implication for increase/decrease in foreign currency liability as though value of assets for the same has to be increased/decreased in books of accounts but the same would not be eligible for depriciation under income tax computation
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