Forex Rates: Which Exchange Rate to Use for Taxes

Forex rates matter to anyone with income, accounts or family in more than one country, because a tax return or account report has to be in one currency and the rate you pick changes the number. This page gives you reference rates, a converter and short charts, and then explains which rate the IRS, FinCEN, the Canada Revenue Agency and Indian rules point to.

Today's reference rates

The table shows how many units of each currency one U.S. dollar buys. The ECB says its reference rates are usually updated at around 16:00 CET every working day, based on a daily consultation among central banks, and that they are published for information purposes only. It discourages using them for transactions. This page gets them through a free service that republishes them, so a Saturday or holiday shows the last business day.

Currency converter

Use the converter for quick estimates. It will not match what your bank charges, because a bank or money transfer service adds a margin to the rate.

Converter uses the reference rates above. Banks and money-transfer services use their own rates and fees.

Ninety-day charts

The charts show the rupee, the Canadian dollar and other pairs over three months. A trend is useful context, and it says nothing about the next rate.

Which rate to use, at a glance

U.S. returns

The IRS says a U.S. return must be in dollars. For most taxpayers, whose functional currency is the dollar, each foreign-currency item is translated at the rate in effect when you receive, pay or accrue it. The IRS has no official rate and generally accepts any posted rate applied consistently. It also publishes yearly average rates, which suit items spread through the year; divide the foreign amount by the rate. Hypothetical example: a landlord who collects ₹600,000 of rent through 2025 could use the IRS 2025 average of 87.133 rupees per dollar, about $6,886. Tax payments to the IRS are converted on the date the bank processes them.

FBAR and Form 8938

FinCEN's FBAR instructions say to convert the maximum account value using the Treasury rate for the last day of the calendar year, and to cite another verifiable source if no Treasury rate is available. The Form 8938 instructions say that in most cases you use the Treasury Fiscal Service rate for purchasing U.S. dollars on the last day of the tax year, even if you closed the account earlier. Treasury's Reporting Rates of Exchange are released quarterly. Treasury describes them as the government's authoritative rates, based on the last business day of the prior month, and notes that they are not current market rates. See our guides to the FBAR for Indian accounts and Form 8938.

Canada

The CRA's income tax folio says amounts in another currency are generally converted at the Bank of Canada rate on the day they arise, using the closest earlier day if none is quoted. Another source is accepted if it is widely available, verifiable and used consistently. An average rate for a period may be accepted for practical reasons, but not if rates fluctuate significantly. The Bank of Canada calls its daily rates indicative, built from averages of aggregated price quotes from financial institutions, and publishes them each business day by 16:30 ET. See the Bank of Canada daily exchange rates, and our Canadian unusual volume page for why frequent traders need a log.

India

Rule 115 of the Income-tax Rules, 1962, as published by the Income Tax Department, converts income in foreign currency at the telegraphic transfer buying rate on a "specified date." That date depends on the income: for salary, the last day of the month before the month the salary is due; for capital gains, the last day of the month before the transfer; for dividends, the last day of the month before declaration; and for house property or business income, the last day of the previous year. The Income-tax Act, 2025 has been in force since April 1, 2026, so confirm the current rules with an Indian chartered accountant. The U.S. and Indian methods can give different dollar and rupee results for the same income, as the example on our Indian new lows page shows.

Remittances and NRI points

• Resident Indians sending money abroad. The RBI says resident individuals may remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme, PAN is mandatory, and there is no limit on frequency. The Press Information Bureau's Budget 2026-27 release proposed tax collected at source on larger remittances, so ask your bank about the rate in force. See the RBI FAQ.
• NRO balances. The RBI's FAQ on accounts in India by non-residents says NRO balances of NRIs and PIOs are remittable up to USD 1 million per financial year, subject to conditions.
• Gifts and inheritance. A large gift or inheritance from India has its own U.S. reporting; see our page on gifts and inheritance from India.
• NRE and NRO interest. Keep statements with dates, because the interest and each deposit need dollar conversions; see NRE, NRO and FCNR accounts.

How we can help

We help clients choose and document a rate method, prepare the FBAR and Form 8938, and reconcile a U.S. return with Indian or Canadian figures. See our international tax services page.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.