Cost Inflation Index for AY 2021-22, Expense Inflation Index for FY 2020-21 for Long Term. Capital gain is the revenue you make on selling an asset. Cost inflation index India is an index issued by the Central Board of Direct Taxes and the figures keep altering every financial year.
Latest News– The Central Board of Direct Taxes has informed cost inflation index for FY 2020-21 at 301 vide notification dated 12 th June, 2020.
Content in this Post.
The formula for calculating the brand-new Purchase price using Expense of Inflation Index is as below.
Indexed Expense of Acquisition =-LRB- ( Expense of Acquisition Expense of the Inflation Index(CII) for the year in which the property was sold or transferred.)/ The expense of Inflation Index (CII) for the year in which the possession was first held by the assessee OR FY 2001-02, whichever is later on.
Capital Gain = Sales Factor To Consider– Indexed Cost of Acquisition
Indexed Cost of Acquisition = Actual Purchase Rate (Index in year of Sale/ Index in Year of Purchase)
If the home is purchased before 2001, then you require to get the Fair market value of the property in 2001 and the usage that for Indexed cost. In such cases,
Indexed Cost = Fair Market price in 2001 (Index in year of Sale/ Base Index i.e. 100)
In the post (further below), I have actually described how can you get the reasonable market value of the property in 2001.
New CII Index Numbers: (applicable from 2017)– Base year is now changed from 1981 to 2001
Budget Plan 2017 has actually changed the base year of Indexation from 1981 to 2001.
Cost Inflation Index
|2009-2010||148||( FY) 2020-21||301|
As the due date for earnings tax is 31 July (now extended to 31 st Aug), you need to make certain that the returns are file on time. From April 2018, tax guidelines have actually changed and a penalty of upto Rs 10000 will be imposed if the return is not submitted on time. The ITR modification time limit is likewise altered from 2 years to 1 year
How to Calculate Indexed Cost of Acquisition Possession
Acquired House on 01- Jul-2004 = Rs 20 Lakh
Sold House on 01- May-2018 = Rs 75 Lakh.
|Indexed Expense of Home||Actual Purchase Price (Index in year of Sale/ Index in Year of Purchase)|
|Rs 20 Lakh (280/ 113) = Rs 49.55 lakhs|
|Sale Quantity||75 Lakh|
|Capital Gain||75 Lakh– Rs 49.55 lakh = Rs 25.44 lakhs|
She offers the asset in FY 2016-17 What is the indexed expense of acquisition?
Here, the possession is bought prior to the base year. Thus the cost of acquisition = Greater of real cost or FMV on 1st April 2001
i.e. Expense of Acquisition = Rs. 3,20,00 0
CII for the year 2001-02 and 2016-17 is 100 and 264 respectively.
Indexed expense of acquisition = 3,20,00 0 x 264/100 = Rs. 8,44,800
Old Expense Inflation Index Numbers:
|Financial Year||Expense Inflation Index||Financial Year||Cost Inflation Index|
|2017-2018||to be announced|