25/02/2019
Computation of capital gains in the case of non~resident :- First proviso to section 48 is applicable only in the case of a non-resident. Under this provision, capital gain is calculated in foreign currency in some cases.
• Conditions To avail the benefit of this provision, the following conditions should be satisfied :-
1. The taxpayer is a non-resident (may be an Indian or foreign citizen, or a corporate-assessee or a non. corporate assessee but not being an assessee covered by sections II5AC and 115AD).
2. He acquires shares in (or debentures of) an Indian company (maybe public limited or private limited ) utilising foreign currency.
3. The asset may be short-term or long-term.
• Rule of computation :- If the aforesaid conditions are satisfied, then the following procedure shall be adopted to determine capital gain (it may be noted that the procedure given below is applicable without any exception whenever the above conditions are satisfied)
1. Capital gain shall be computed in the same foreign currency which was initially utilised in acquiring shares or debentures.
2. Capital gain so calculated in the foreign currency shall be reconvened into Indian currency.
3. The benefit of indexation shall not be available.
4. The aforesaid manner of computation of capital gain shall be applicable in respect of capital gain accruing or an‘sin g from every re-investment thereafter in (and sale of) shares in (or debentures of an Indian company.
5. The aforesaid mode of computation is applicable only when the above-mentioned conditions are satisfied In no other case, the above procedure is applicable.
6. The aforesaid mode of computation is not applicable when capital gain is covered by section 112A.
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