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Under the Income-tax Rules, 2026, for tax year 2026–27, at what annual rate is interest imputed on excess money not repatriated after a secondary adjustment, where the international transaction is…

Question and options

Under the Income-tax Rules, 2026, for tax year 2026–27, at what annual rate is interest imputed on excess money not repatriated after a secondary adjustment, where the international transaction is denominated in foreign currency?

  1. The reference rate for the relevant currency on 1 April plus 300 basis points

  2. The reference rate for the relevant currency on 30 September plus 300 basis points

  3. The reference rate for the relevant currency on 30 September plus 325 basis points

  4. SBI’s one-year marginal cost of fund lending rate on 1 April plus 325 basis points

Answer and explanation

Correct answer: B - The reference rate for the relevant currency on 30 September plus 300 basis points

Rule 83 of the Income-tax Rules, 2026 fixes the rate for a foreign-currency transaction at the reference rate of the relevant currency, as defined in rule 89(3), as on 30 September of the relevant tax year plus 300 basis points. The State Bank of India rate with 325 basis points, fixed on 1 April, is the rule for rupee-denominated transactions.

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