Taxation of foreign exchange fluctuation: gains or losses on currency transactions treated as income or loss, computed under prescribed standards.

Gains or losses from changes in foreign exchange rates on foreign currency transactions are treated as income or loss and computed under the Income Computation and Disclosure Standards notified under section 276(2); this applies to monetary and non-monetary items, translation of foreign operations, forward exchange contracts, and foreign currency translation reserves, while related provisions require capitalising exchange variation at acquisition or payment by adjusting the asset or liability and treating resultant exchange profits or losses in business income.

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