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Markets Data. Market Moguls. Expert Views. Technicals Technical Chart. Commodities Views News. Forex Forex News. Currency Converter. More Sitemap Definitions. Powered by. Capital gains tax to be applicable on increase in share value, not currency fluctuations: Ruling. Sachin Dave. Font Size Abc Small. Abc Medium. Abc Large. Agencies The gain was mainly due because Indian rupee devalued against the Euro, and not due to the jump in the share price. Mumbai: Tax on capital gains is only applicable if price of shares has increased and should not be levied if the increase is only due to currency fluctuations , an income tax appellate tribunal has ruled.
As per the details of the case, an Indian arm of a multinational which is into manufacturing of household appliances had invested in one of its foreign subsidiaries.
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However, when the money was repatriated to India, this resulted in a gain. The gain was mainly due because Indian rupee devalued against the Euro, and not due to the jump in the share price. However, treating it as capital gains in the financial statement would mean nil tax liability.
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Uday Kalbag days ago. If time value of money is the consideration for this judgement then why same principle is not applicable for Indian transactions. View Comments Add Comments. Payments NFC vs.
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How FOREX Trades Are Taxed
To see your saved stories, click on link hightlighted in bold. Capital gains arising from the disposal of Turkish company shares by nonresidents are subject to capital gains taxation in Turkey, under certain conditions. In the calculation of the capital gains, there are various methods used to decrease the capital gains tax base. One of the methods is the exemption applied on the gains arising from the FX rate differences, under the conditions stipulated under Repeated Article 81 of the Income Tax Code.
One of the conditions to benefit from such exemption is that the acquisition value in foreign currency of the participation shares should be physically brought into Turkey or transferred to banks operating in Turkey. Where the participation shares that were acquired by nonresident persons including corporations by bringing the foreign currency into Turkey are acquired by other nonresident taxpayers, and where the acquisition value is not brought into Turkey, the FX exemption corresponding to the initial acquisition value where the foreign currency is brought into Turkey can be utilized however, for the remaining acquisition value it would not be possible to benefit from the FX exemption.
Provisions of Double Tax Treaties that Turkey is a party to, without prejudice, continue to be used in the taxation treatment of the capital gains derived by nonresidents arising from the disposal of participation rights in Turkish companies. For additional information with respect to this Alert, please contact the following:.