Income Tax Act, 1961
Section 6: Ins. by Act 33 of 2009, s. 17 (w.e.f. 12010).
6. Ins. by Act 33 of 2009, s. 17 (w.e.f. 12010).
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1[43A. Special provisions consequential to changes in rate of exchange ofcurrency.—
Notwithstanding anything contained in any other provision of this Act, where an assessee has acquired
any asset in any previous year from a country outside India for the purposes of his business or profession
and, in consequence of a change in the rate of exchange during any previous year after the acquisition of
such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency
(as compared to the liability existing at the time of acquisition of the asset) at the time of making
payment—
(a) towards the whole or a part of the cost of the asset; or
(b) towards repayment of the whole or a part of the moneys borrowed by him from any person,
directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset along
with interest, if any,
the amount by which the liability as aforesaid is so increased or reduced during such previous year and
which is taken into account at the time of making the payment, irrespective of the method of accounting
adopted by the assessee, shall be added to, or, as the case may be, deducted from—
(i) the actual cost of the asset as defined in clause (1) of section 43; or
(ii) the amount of expenditure of a capital nature referred to in clause (iv) of sub-section (1) of
section 35; or
(iii) the amount of expenditure of a capital nature referred to in section 35A; or
(iv) the amount of expenditure of a capital nature referred to in clause (ix) of sub-section (1) of
section 36; or
(v) the cost of acquisition of a capital asset (not being a capital asset referred to in section 50) for
the purposes of section 48,
and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset
or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the
capital asset as aforesaid:
Provided that where an addition to or deduction from the actual cost or expenditure or cost of
acquisition has been made under this section, as it stood immediately before its substitution by the
Finance Act, 2002, on account of an increase or reduction in the liability as aforesaid, the amount to be
added to, or, as the case may be, deducted under this section from, the actual cost or expenditure or cost
of acquisition at the time of making the payment shall be so adjusted that the total amount added to, or, as
the case may be, deducted from, the actual cost or expenditure or cost of acquisition, is equal to the
increase or reduction in the aforesaid liability taken into account at the time of making payment.
Explanation 1.—In this section, unless the context otherwise requires,—
(a) “rate of exchange” means the rate of exchange determined or recognised by the Central
Government for the conversion of Indian currency into foreign currency or foreign currency into
Indian currency;
(b) “foreign currency” and “Indian currency” have the meanings respectively assigned to them in
section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
Explanation 2.—Where the whole or any part of the liability aforesaid is met, not by the assessee,
but, directly or indirectly, by any other person or authority, the liability so met shall not be taken into
account for the purposes of this section.
towards the whole or a part of the cost of the asset; or
towards repayment of the whole or a part of the moneys borrowed by him from any person,
directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset along
with interest, if any,
the amount by which the liability as aforesaid is so increased or reduced during such previous year and
which is taken into account at the time of making the payment, irrespective of the method of accounting
adopted by the assessee, shall be added to, or, as the case may be, deducted from—
the actual cost of the asset as defined in clause
of section 43; or
the amount of expenditure of a capital nature referred to in clause
of sub-section
of
section 35; or
the amount of expenditure of a capital nature referred to in section 35A; or
the amount of expenditure of a capital nature referred to in clause
of sub-section
of
section 36; or
the cost of acquisition of a capital asset (not being a capital asset referred to in section 50) for
the purposes of section 48,
and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset
or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the
capital asset as aforesaid:
Provided that where an addition to or deduction from the actual cost or expenditure or cost of
acquisition has been made under this section, as it stood immediately before its substitution by the
Finance Act, 2002, on account of an increase or reduction in the liability as aforesaid, the amount to be
added to, or, as the case may be, deducted under this section from, the actual cost or expenditure or cost
of acquisition at the time of making the payment shall be so adjusted that the total amount added to, or, as
the case may be, deducted from, the actual cost or expenditure or cost of acquisition, is equal to the
increase or reduction in the aforesaid liability taken into account at the time of making payment.
Explanation 1.—In this section, unless the context otherwise requires,—
“rate of exchange” means the rate of exchange determined or recognised by the Central
Government for the conversion of Indian currency into foreign currency or foreign currency into
Indian currency;
“foreign currency” and “Indian currency” have the meanings respectively assigned to them in
section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
Explanation 2.—Where the whole or any part of the liability aforesaid is met, not by the assessee,
but, directly or indirectly, by any other person or authority, the liability so met shall not be taken into
account for the purposes of this section.