Cost Inflation Index for AY 2021-22, Cost Inflation FY 2020-21

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.

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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.
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Formula

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

Financial Year CII YEAR CII
2001-02 100 2012-13 200
2002-03 105 2013-14 220
2003-04 109 2014-15 240
2004-05 113 2015-16 254
2005-06 117 2016-17 264
2006-07 122 2017-18 272
2007-08 129 2018-19 280
2008-09 137 2019-20 289
2009-2010 148 ( FY) 2020-21 301
2010-11 167
2011-12 184

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

Example 1:

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
1981-82 100 1999-2000 389
1982-83 109 2000-01 406
1983-84 116 2001-02 426
1984-85 125 2002-03 447
1985-86 133
1986-87 140 2003-04 463
1987-88 150 2004-05 480
1988-89 161 2005-06 497
1989-90 172 2006-07 519
1990-91 182 2007-08 551
1991-92 199 2008-2009 582
1992-93 223 2009-10 632
1993-94 244 2010-2011 711
1994-95 259 2011-2012 785
1995-96 281 2012-2013 852
1996-97 305 2013-2014 939
1997-98 331 2014-2015 1024
1998-99 351 2015-2016 1081
2016-2017 1125
2017-2018 to be announced
2018-2019 280
2019-2020 289

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