CBDT Notifies Exchange Rate For TDS Deduction On Income Payable In Foreign Currency

The Central Board of Direct Taxes (CBDT) has notified the rate of exchange for the purpose of deducting tax at source (TDS) on income payable in foreign currency.

The board has inserted Rule 26 in the Income-tax Rules, 1962, by notifying the Income-tax (Seventeenth Amendment) Rules, 2023.

As per the new Rule, for deducting the TDS on any income payable in foreign currency, the rate of exchange for the calculation of the value in rupees of the income payable shall be the telegraphic transfer buying rate of a currency as on the date on which the tax is required to be deducted at source under the provisions of Chapter XVIIB by the person responsible for paying the income.

The income shall be payable in foreign currency to an assessee outside India, to a unit located in an international financial services centre, or by a unit located in an international financial services centre to an assessee in India.

The term "telegraphic transfer buying rate", in relation to a foreign currency, means the rate or rates of exchange adopted by the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), for buying such currency, having regard to the guidelines specified from time to time by the Reserve Bank of India for buying such currency, where such currency is made available to that bank through a telegraphic transfer.

Notification No. 64/2023

Date: 17/08/2023

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