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Corporate TaxArticle·24 December 2025

Statutory Boundaries of Hedging losses

By JustIDT

Executive Summary

The Delhi ITAT’s ruling in PCL Foods Pvt. Ltd. draws a hard statutory line. The commercial intent to manage forex risk does not override section 43(5). For exporters and CFOs, this is a reminder that treasury strategy must be tax-aligned from day one, because in derivative taxation, form still trumps substance. J the App by JustIDT takes a deep dive.

Foreign Exchange Hedging Losses under Income Tax Law; Analysis of ITAT Delhi in PCL Foods Pvt. Ltd.

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