Foreign Currency – Section 2(47) | Income-tax Act, 2025 vs 1961

§ 2(47) · Income-tax Act, 2025

Foreign currency

ITA 2025 · 2(47) ≈ Expl. to S.2(47A) · 1961 Act
Definition — Section 2(47)

Has the same meaning as assigned to it in section 2(m) of the Foreign Exchange Management Act, 1999. Accordingly, "foreign currency" means any currency other than Indian currency — that is, any currency other than currency expressed or drawn in Indian rupees.

Act Comparison
Income-tax Act, 2025
2(47)
Foreign currency
Income-tax Act, 1961
Expl. to S.2(47A)
Foreign currency — defined via FEMA reference in Explanation to S.2(47A)
Key Points
  • Existed in the 1961 Act via Explanation to Section 2(47A) — the 2025 Act elevates it to a standalone Section 2 definition; both Acts cross-refer to Section 2(m) of FEMA, 1999
  • Relevant for forex gain/loss computations on capital assets and transfer pricing
  • FEMA definition ensures alignment with the RBI-regulated foreign exchange framework
💡 Practical Note

Gains on foreign currency fluctuations on capital assets are treated as capital gains — not business income, unless you're in the forex trading business.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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