Skip to content

CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under the Income-tax Act, 2025, for computing the exemption under section 215 on transfer of a foreign exchange asset by an NRI, 'net consideration' means:

Net consideration is the full value of consideration received or accruing on the transfer, less expenditure incurred wholly and exclusively in connection with that transfer. Section 215(2)(b) does not allow deduction of cost of acquisition, so it differs from the capital gain itself.

  1. AFull value of consideration reduced by cost of acquisition and indexation
  2. BFull value of consideration reduced by expenditure incurred wholly and exclusively in connection with the transferCorrect
  3. CFull value of consideration reduced by the long-term capital gain computed
  4. DFull value of consideration without any deduction

Explanation

Section 215(2)(b) defines net consideration as the full value of consideration received or accruing, reduced by expenditure wholly and exclusively incurred in connection with the transfer. Cost of acquisition is not deducted, which is why the first option is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Income Tax Implication on Specified Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Income Tax Implication on Specified TransactionsFree diagnostic mock

More Income Tax Implication on Specified Transactions questions