The rate of exchange for the purpose of deducting tax at source (TDS) on the income liable to get paid in the foreign currency, the Central Board of Direct Taxes (CBDT) notified.
The board has inserted Rule 26 in the Income-tax Rules, 1962, through notifying the Income-tax (Seventeenth Amendment) Rules, 2023.
Under the revised rule to deduct the TDS on any income liable to get paid in the foreign currency the exchange rate for the computation of the value in rupees of the income subjected to get paid will be the telegraphic transfer buying rate of a currency as on the date on which the tax needed to get deducted at source via person liable to pay the income under the provision of Chapter XVIIB.
Before the taxpayer outside India, the income would like to get paid in foreign currency to the unit located in the international financial services centre or through the unit located in the international financial services centre to the taxpayer in India.
In concern with foreign currency, the term telegraphic transfer buying rate directed to the rate or the rates of exchange taken via the State Bank of India comprised under the State Bank of India Act, 1955 (23 of 1955) to buy these currencies that is pertinent with the norms mentioned over the time via Reserve Bank of India to purchase the same currency in which that currency is available to that bank via the telegraphic transfer.
