Taxes on currency-exchange gains in a NRE account?

smariner · Post by **smariner** » Tue Nov 22, 2011 9:10 am

As an example -- let's say one puts $1 in a NRE account when the exchange rate is Rs. 50; and repatriates the money back to the US when the exchange rate is Rs 45 (ie. repatriation amount is US$ 1.11)
Does one need to pay taxes on the gain of 11 cents?

smariner · Post by **smariner** » Wed Nov 30, 2011 12:09 am

smariner;424423As an example -- let's say one puts $1 in a NRE account when the exchange rate is Rs. 50; and repatriates the money back to the US when the exchange rate is Rs 45 (ie. repatriation amount is US$ 1.11)
Does one need to pay taxes on the gain of 11 cents?

Anyone know the answer to this?

greyfri · Post by **greyfri** » Tue Dec 13, 2011 11:34 pm

smariner;424423As an example -- let's say one puts $1 in a NRE account when the exchange rate is Rs. 50; and repatriates the money back to the US when the exchange rate is Rs 45 (ie. repatriation amount is US$ 1.11)
Does one need to pay taxes on the gain of 11 cents?

Yes. Basically the rupee is treated as a 'commodity' that you are buying and selling and you can take gains and losses. Google for Section 988.