Rule 115A - Rate of exchange for conversion of rupees into foreign currency and reconversion of foreign currency into rupees for the purpose of computation of capital gains under the proviso to clause (a) of sub-section (1) of section 48 of the Income-tax Act, 1961.

Rule 115A: Currency Conversion for NRIs' Capital Gains on Indian Shares or Debentures Explained

For non-resident Indians computing capital gains from transferring shares or debentures of an Indian company, Rule 115A of the Income-tax Rules, 1962 specifies exchange rates for currency conversion. The cost of acquisition and related expenditures are converted using the average telegraphic transfer buying and selling rates on the acquisition and transfer dates, respectively. The full value of consideration from the transfer is similarly converted. Capital gains are reconverted into rupees using the telegraphic transfer buying rate on the transfer date. Definitions for telegraphic transfer buying and selling rates are provided, with the latter based on the State Bank of India's rates.