This ss is taken from a report by indmoney sent to my friend for his capital losses
They have mentioned in the report to get the buying value in INR it will be quantity x buying price x usd inr conversion rate and for selling it will be quantity x selling price x usd inr conversion rate. Since the date of acquisition is 2022 and date of selliing is 2024. How can the inr to usd conversion rate be same for both buying and selling?
I don’t think they are doing this anywhere.
There report simply state Cost was 10 USD (buying Price USD * Quantity) and Selling Proceed is 2.12 USD (Selling price USD * qty) so net loss is 7.88 USD
This loss they are converting to INR662.** using curent conversion rate of 84.0886
IMHO, while calculating gains/income on an US-denominated asset,
not accounting for the USD-INR appreciation, appears to be incorrect.
Maybe, a separate statement contains the accounting gains/losses in USD-INR? 
If one bought something for 10 USD in 2022,
and sold it for 2.12 USD in 2024,
to calculate the overall gain/loss -
Right?
@Quicko thoughts?
True!
We need to know the INR values both at the time of investment and at the time of sale, to calculate the actual gain/loss.
The net gain/loss from a foreign investment would therefore include any gain/loss on account currency appreciation or depreciation as well.
Eg:
Suppose the ₹/$ at the time of investment was say ₹60
The actual cost of acquisition in INR terms would be ($10*60)= ₹600
If at the time of sale, the ₹/$ is 84
The sale proceeds would be
($2.12 * 84) = ₹178
The net loss would be (178 - 600) = ₹422
The net loss of ₹422 includes the gain on account of USD appreciation, to the tune of ₹51
$2.12 * (84-60)
To put it alternatively, if both the Cost basis and sale proceeds were same (i.e., $10) there would no gain/loss in USD terms, but in INR terms, there would still be some gain due to USD appreciation during the investment period.
IMO, only the sale proceeds should be converted into INR, not the gain or loss, as this distorts the actual cash flow.
In general, the cost of acquisition would be in INR (which gets converted to USD), only the sale proceeds need to be converted into INR using the exchange rate on that day, to calculate the gain/loss in INR terms.
For my knowledge
In the above transaction, 007…tax007, had some securities in USD.
A portion of the same i.e 0.03189182 was sold at 66.4 per unit. The effective sale proceeds was USD 2.12 (0.03189182 x 66.4 market price)
The purchase price of the same units was USD 313.56 per unit.
This would mean the cost of selling the units of 0.03189182 was USD 10 (0.03189182 x 313.56).
The net loss will be USD 10 (cost) minus sale proceeds i.e USD 2.12 = USD 7.88
The loss is converted back to INR (notionally for reporting at mid rate) at the closing USD to INR on the sale date i.e 21.11.2024 ie 84.08 (7.88 x 84.08) This translates to 662.62.
So the loss will be 662.62.
What is wrong with this data set?
Why should we consider the buy rate, of the USD :-
Need clarity for my understanding only.
IMO, you don’t convert the loss/gain in USD terms directly to INR, as this distorts the actual cash flows involved in the investment.
What if, the sale was for $10 in the above scenario, the gain/loss in USD terms will be NIL right, but in INR terms there would still be some gains due to USD appreciation (i.e., due the difference in the exchange rate between the sale and purchase date)
Now, let’s consider an example to understand how this works. Suppose you invested Rs. 1,00,000 in foreign stocks on April 1, 2018, which was equivalent to, say, $1,500.
When you sold your investment on August 31, 2024, say, you received $2,500.
As the stocks are held for more than 24 months, it qualifies for a long-term capital gains tax rate of 12.5%.
For tax purposes in India, you need to convert the sale amount into Indian rupees. You must use the exchange rate (telegraphic transfer buying rate provided by the State Bank of India) on the last day of the month prior to the month in which the sale happened.
In our example, since the sale happened in August, take the exchange rate at the end of July 2024. It was Rs. 83.7.
So, your sale value, as per Indian tax rules, would be about Rs. 2.09 lakh (Rs. 83.7 * $2,500).
Next, let’s calculate the taxable capital gains: Capital gains = Rs. 1,09,250 (Rs. 2,09,250 – Rs. 1,00,000).
Therefore, tax to be paid = Rs 1,09,250*12.5%, about Rs 13,656.
In the above example, the gains in USD terms is (2500-1500) = $1000
Instead of converting the sale proceeds into INR and then calculating the capital gains, if we convert the gains in USD terms to INR using the exchange rate of ₹83.7, the gains would be (83.7*1000) = ₹83,700
Don’t you see this is wrong ?
The actual gains in INR terms is ₹1,09,250
(i.e., INR cash inflow - INR cash outflow), not ₹83,700
Converting only the gain/loss in USD terms using the exchange rate on the date of sale will not reflect the actual gains, as it doesn’t take into account the actual cash flow involved at the time of purchase and sale.
Gain/loss on investment =
(Amount credited - Amount debited) from your bank a/c in relation to that investment.
@Akash_Shah @cvs @SG_13 @neha1101
So, upon reading more threads I found that the USD to INR rate is calculated by dividing the loss in inr by the loss in usd in the excel. A question on this, does this mean that we have derived the correct SBI TTBR rate?
Another question, the cost basis section in the photo. Can you please eli5 with an example what does this mean acutally and how is it different than the purchase price? Also is commission charged by indmoney included in cost basis or do one have to calculate it later themselves?
This is how I thought commission should be calculated, please correct me where I am wrong and if its already done in cost basis. Make a new column of all purchases and sales in USD then multiply those figures with the commission % (since commission is charged on USD) and then use the USD/INR conversion rate as you have mentioned above to convert it in INR. This way there will be two commissions, commission on purchases and on sales. Do we need to add them both and then mention the total of both these in the expenses incurred for acquiring the security box?
If whoever issued the statement in the screenshot followed the SBI TTBR rate,
then yes, otherwise no.
So very likely not.
This would depend on specifially how Indmoney does the accounting.
Hard to say for sure without knowing those details.
One way to determine this would be to collect
Assuming this is classified as Brokerage fees, then yes.
