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Capital gains
Direct Taxation
I have doubt in 1st proviso to section 48 sir why we convert cost of acquisition , expenses on transfer and full consideration in foreign currency and compute capital gains and reconvert to Indian currency .why sir? Already there in Indian currency we straight away we compute capital gains why we convert to foreign currency and reconvert to Indian currency?
Answers (2)
CA Suraj Lakhotia Admin
Some type of benefit for foreign investors
Dollar appreciates against Rupee. Say you invested when $1 = 100. Cost of investment is 100. When you sold at 150, $1 = 125. In INR Gain = 50 But if you convert the sales proceeds back to $, it would be $1.2 So Net Gain of only $0.2. Now when you convert this to INR it would be only 25.
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