Section 215 - Capital gains on transfer of foreign exchange assets not to be charged in certain cases.

Non-resident Indian reinvesting long-term capital gains from foreign exchange assets gets exemption pro rata; recapture if sold within three years

Where a non-resident Indian realizes long-term capital gains on transfer of a foreign exchange asset and reinvests all or part of the net consideration in a specified asset within six months, the gain is relieved from tax to the extent the cost of the new asset equals or exceeds the net consideration; if less, the exempt portion is B×C/D (B = total gain, C = cost of new asset, D = net consideration). 'Cost' for certain deposits means the deposit amount and 'net consideration' is consideration less transfer expenses. If the new asset is sold or converted into money within three years, the previously exempted gain becomes taxable as capital gain in the year of that sale or conversion.