Rule 26, I.T. Rules 1962: Exchange Rate For TDS - Income Payable Foreign Currency

Rule 26 : Rate of exchange for the purpose of deduction of tax at source on income payable in foreign currency
(Chapter: VI - Deduction of Tax at Source)

For the purpose of deduction of tax at source on any income payable in foreign currency, the rate of exchange for the calculation of the value in rupees of such income payable to an assessee outside India shall be the telegraphic transfer buying rate of such 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 such income.

Explanation : For the purposes of this rule, "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.

Extra Notes for Readers:

- Rule 26 was substituted by the Income Tax (8th Amendment) Rules 1977, w.e.f. 1-Nov-1977

Check at Income Tax Dept. official site for latest version of the Rule.

This page was created/last updated on 17th October 2016.