Rule 52Published

Rule 52: Exchange rates for non-resident capital gains

Rule 52 prescribes exchange-rate choices for the specified non-resident capital-gains computation involving shares or debentures of an Indian company. Cost, transfer expenditure, consideration and the final gain use different conversion steps.

Official notified Income-tax Rules, 2026

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This article is for general information. Read the official Rules and applicable Act amendments, including the Taxation and Other Laws (Amendment) Act, 2026. If you need professional advice for your situation, contact Bizeneed.

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Bare law
Identify the specified non-resident computation
Convert acquisition cost at the acquisition-date average
Convert transfer costs and consideration at transfer-date averages
Reconvert the computed gain using the buying rate
Use the defined rate sources and retain the calculation
Key takeaways
Practical checklist
FAQs
Glossary
Official sources

Bare law

Rule 52 - Rate of exchange for conversion of rupees into foreign currency and reconversion of foreign currency into rupees for purpose of computation of capital gains under section 72
(1) For the purpose of computing capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company, in the case of an assessee who is a non-resident, the rate of exchange shall be, in the circumstances referred to in column B of the following table, as per column C thereof:—
S.No Circumstances Rate of Exchange
1. For converting the cost of acquisition of the capital asset The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of its acquisition.
2. For converting the expenditure incurred wholly and exclusively in connection with the transfer of the capital asset referred to in Sl.No. 1, The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset.
3. For converting the full value of consideration received or accruing as a result of the transfer of the capital asset referred to in Sl.No. 1, The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset.
4. For converting the capital gains computed in the foreign currency initially utilised in the purchase of the capital asset into rupees, The telegraphic transfer buying rate of such currency, as on the date of transfer of the capital asset.
(2) For the purposes of this rule,– (a) "telegraphic transfer buying rate" shall have the meaning assigned to it in rule 206; and (b) "telegraphic transfer selling rate", in relation to a foreign currency, means the rate of exchange adopted by the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), for selling such currency where such currency is made available by that bank through telegraphic transfer.

S.No	Circumstances	Rate of Exchange
1.	For converting the cost of acquisition of the capital asset	The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of its acquisition.
2.	For converting the expenditure incurred wholly and exclusively in connection with the transfer of the capital asset referred to in Sl.No. 1,	The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset.
3.	For converting the full value of consideration received or accruing as a result of the transfer of the capital asset referred to in Sl.No. 1,	The average of the telegraphic transfer buying rate and telegraphic transfer selling rate of the foreign currency initially utilised in the purchase of the said asset, as on the date of transfer of the capital asset.
4.	For converting the capital gains computed in the foreign currency initially utilised in the purchase of the capital asset into rupees,	The telegraphic transfer buying rate of such currency, as on the date of transfer of the capital asset.

Rule breakdown

Identify the specified non-resident computation

The rule concerns a non-resident transferring shares in or debentures of an Indian company for the relevant section 72 computation. Identify the foreign currency initially used to buy the asset.

It is not a general instruction to convert every capital asset or every taxpayer’s gain by these rates.

Convert acquisition cost at the acquisition-date average

Use the average of the telegraphic transfer buying and selling rates of the currency initially used to purchase the asset, on its acquisition date, for the cost conversion.

Keep the acquisition date, foreign-currency payment and supporting rate evidence. Do not substitute the later sale-date rate for this step.

Convert transfer costs and consideration at transfer-date averages

For expenditure wholly and exclusively connected with the transfer, and for the full value of consideration, the table uses the average of the same currency’s telegraphic transfer buying and selling rates on the transfer date.

The same type of average is used as for cost, but the relevant date differs. Record each conversion separately in the working paper.

Reconvert the computed gain using the buying rate

Once the gain has been computed in the originally used foreign currency, convert that gain into rupees using the telegraphic transfer buying rate on the transfer date. This final step does not use the buying-selling average.

Hypothetical: if the computed foreign-currency gain is USD1,000 and the applicable transfer-date buying rate is ₹83 per USD, the reconverted gain is ₹83,000. The example assumes the preceding computation and all eligibility conditions are correctly established.

Use the defined rate sources and retain the calculation

The buying-rate expression has the meaning assigned by Rule 206. The selling-rate definition refers to the State Bank of India rate for selling the currency where it is made available by telegraphic transfer.

Keep the relevant dates, currency, underlying rate evidence, averages and final reconversion together. A generic online mid-market quote should not be assumed to meet these statutory definitions.

Key takeaways

Acquisition date for cost

Use the buying-selling average on that date.

Transfer date for proceeds and costs

Use the prescribed transfer-date averages.

Buying rate for final gain

The final rupee conversion uses the transfer-date buying rate alone.

Practical checklist

Record the originally used foreign currency and relevant dates.
Keep the defined rate evidence and each conversion step.
Use the buying rate alone for the final reconversion.

Avoid

Do not apply a single convenient rate to every item.
Do not assume a generic market quote matches the statutory definition.

FAQs

Is one exchange rate used for every step?

No. Cost uses its acquisition-date average; transfer costs and consideration use transfer-date averages; the computed gain uses the transfer-date buying rate.

Can the final gain be reconverted with the average rate?

The table specifies the telegraphic transfer buying rate for that final reconversion.

Does this apply to every non-resident asset sale?

The rule identifies shares in or debentures of an Indian company for the relevant section 72 computation.

Glossary

Telegraphic transfer buying rate: The rate expression given its meaning by Rule 206.
Telegraphic transfer selling rate: The State Bank of India selling rate described in Rule 52(2)(b).
Reconversion: Converting the foreign-currency capital gain into rupees using the table’s final-step rate.

Official sources

Official notified Income-tax Rules, 2026 — Notification 22/2026