Exchange rate variation adjusts capital asset cost for cross-border acquisitions, adding or deducting exchange differences on payment. Where an assessee acquires an asset from a country outside India and subsequent exchange rate changes alter the liability in Indian currency at payment, the increase or reduction taken into account on payment must be added to or deducted from the asset's actual cost or specified capital expenditure or cost of acquisition under clauses (i)-(v). Prior adjustments under the earlier provision must be reconciled so the total addition or deduction equals the exchange-related change. Definitions, exclusions for third-party payments, and computation with reference to an authorised dealer contract rate are provided.