Rupee denominated bond transfers between non-residents are excluded from capital gains treatment, with redemption currency gains ignored.

Transfer outside India of rupee denominated bonds issued outside India by an Indian company and made by a non-resident to another non-resident is treated as a non-transfer for capital gains purposes. For a non-resident assessee, any gain arising from appreciation of the rupee against a foreign currency at the time of redemption of such rupee denominated bond is ignored while computing the full value of consideration.

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