I am an Indian resident and earn rental income from the US. Which exchange rate should I consider for filing my income tax return? Also, how is the conversion calculated if I receive the entire year’s income at once?
Under the India income tax law, exchange rate for conversion of income earned in foreign currency into Indian rupees is the telegraphic transfer buying rate (TTBR) issued by State Bank of India. For rental income earned in foreign currency, TTBR of last day of the financial year needs to be considered. If the foreign rental income is received outside India, the conversion needs to be made at the year-end TTBR rate, whether the entire rental income is received at once or not. If the foreign rental income is directly received in India, then the rupee value credited in the bank account needs to be considered. You will get TTBR for the relevant FY at SBI’s forex division.
Sonu Iyer is tax partner and people advisory services leader, EY India