The era of ₹83 is officially over.

If you have been watching the news, you know the numbers look red. Today, the Indian Rupee hit an all-time low of ₹90.75 against the US Dollar.

For most of us, currency rates usually feel like just numbers on a ticker tape. But a drop this big is different. It is nearly a 7% fall since the start of the year, and that changes the cost of living and doing business for almost everyone.

At TheTaxCo, we want to look past the panic. We want to explain exactly why this is happening and, more importantly, what you should do about it depending on who you are.

Part 1: Why is this happening right now?

The Rupee did not just fall on its own. It was pushed by three specific economic triggers that all hit at the same time.

1. The New US Tax

The biggest reason is the new 50% tax the US has put on Indian goods. The United States is one of India's biggest customers. When our goods become 50% more expensive for American buyers, they buy less. When exports drop, the demand for the Rupee drops with it.

2. No Trade Deal Yet

Markets get nervous when there is uncertainty. Everyone was hoping for a new trade agreement between India and the US to fix these issues. But recent reports confirm that talks are paused until at least March 2026. This means businesses are preparing for a few more months of difficult trade conditions.

3. Investors Are Leaving

Money goes where it feels safe. With all this uncertainty, foreign investors have pulled over $18 Billion out of Indian markets this year. They are selling their Rupees to move their money back to the US Dollar, which pushes the value of the Rupee down even further.

Part 2: How this hits your wallet (The "Bad News")

You might not trade currencies, but you definitely buy things that are priced in Dollars. Here is how this impacts your daily expenses.

Gadgets and Electronics

Most parts for your smartphone, laptop, and TV are imported. Companies run on thin margins and cannot just absorb a 7% increase in costs. You can expect price tags on electronics to go up by 3% to 5% starting in January.

The Vacation Cost

If you are planning a foreign holiday for the New Year, your budget just got smaller. Flight tickets, hotel bookings, and shopping abroad are now 7% more expensive than they were in January.

Hidden Inflation (Vegetables & Milk)

This is the part that hurts the most. India imports about 85% of its crude oil and pays for it in Dollars.

• When the Rupee is weak, oil gets expensive.

• When oil is expensive, transport costs rise.

• Eventually, this makes vegetables, milk, and daily essentials more costly.

Part 3: The Specific Impact (Who Needs to Act?)

This is where the details matter. Depending on your role, your strategy needs to change today.

For Freelancers & Agencies (Earning in USD)

You are the clear winners here, but only if you manage your money right.

• The Gain: Your income just increased by ~7% without you doing any extra work.

• The Trap: Don't rush to convert everything to INR immediately if you have USD expenses (like software subscriptions or server costs).

• The Pro Tip: Open an EEFC (Exchange Earners' Foreign Currency) Account. This lets you keep your earnings in USD. You can use this balance to pay for your foreign expenses directly without losing money on double conversion charges.

• Tax Note: Remember to get your FIRC (Foreign Inward Remittance Certificate) for every payment. Without it, you cannot prove this is export income, which is crucial for claiming your 0% GST benefit (with LUT).

For Students & Parents (Paying Fees)

The cost of education abroad just jumped.

• The Impact: If your semester fee is $20,000, it cost you ~₹16.6 Lakhs in January. Today, it costs ~₹18.1 Lakhs. That is an extra ₹1.5 Lakhs out of pocket.

• The Tax Rule (TCS): Be careful with the "Tax Collected at Source." As of the April 2025 rules, if you send more than ₹10 Lakhs for education (self-funded), the bank will deduct 5% TCS.

• Advice: Do not wait for the rate to drop back to ₹85. The trend suggests we could see ₹91 soon. Pay your fees now to lock in today's rate.

For Investors (US Stocks)

If you hold stocks like Apple or Tesla, your portfolio value in INR has gone up.

• The Tax Reality: If you decide to book profits now, remember the new tax rules for FY 2025-26.

  • Long Term (Held > 24 months): Taxed at 12.5%.

  • Short Term (Held < 24 months): Taxed at your slab rate.

• Dividends: The US withholds 25% tax on dividends. You can claim this back as a credit in India, but you must file Form 67 before your ITR.

The Bottom Line: What Should You Do?

Here is our simple checklist to protect your money this week:

1. Freelancers: Check if your bank has issued your FIRCs for the last quarter. You will need them for GST filing.

2. Travelers: If you are booking a large holiday package (> ₹10 Lakhs), be ready for 20% TCS to be blocked from your account.

3. Importers: If you have a payment due in the next 30 days, hedge it. Talk to your bank about a forward contract. The risk of ₹92 is real.

4. Everyone: Avoid keeping too much idle cash. Invest in assets like Gold or IT-sector mutual funds that naturally do well when the Rupee is weak.

Need a Review?

Currency changes can lead to complicated tax situations. If you are unsure how ₹90.75 affects your advance tax or GST refunds, reach out to us. We can help you make sense of the numbers.