Cost Inflation Index – Capital Gain

Cost Inflation index for the Financial Year 2014-2015 has been announced to be 1024

For computing long-term capital gains, knowledge of cost inflation index is necessary. The capital gains will be computed after deducting the indexed cost of acquisition (purchase) from the full value of consideration. The cost of purchase of the asset will be increased by applying the cost inflation index (CII). Once the cost inflation index is applied to the cost of acquisition, it becomes indexed cost of acquisition.

In computing capital gains arising from the transfer of a long term capital asset, deduction can be claimed for the cost of acquisition and the cost of Improvement after indexing them.

Cost inflation Index” for any year means such index as the central government may, having regard to 75% of average rise in consumer price index for urban non manual employees for the immediately preceding previous year to such previous year by notification in the official gazette specify in this behalf.

This means an amount which bears to the cost of acquisition, the same proportion as CII for the year in which the asset is transferred bears to the CII for the first year in which the asset was held by the assessee or for the year beginning on 1st April, 1981, whichever is later.

Cost Inflation Index – For Capital Gain

The cost inflation indices for the financial years so far have been notified as under:

Financial YearCost Inflation IndexFinancial YearCost Inflation Index
1981 – 821001997 – 98331
1982 – 831091998 – 99351
1983 – 841161999 – 00389
1984 – 851252000 – 01406
1985 – 861332001 – 02426
1986 – 871402002 – 03447
1987 – 881502003 – 04463
1988 – 891612004 – 05480
1989 – 901722005 – 06497
1990 – 911822006 – 07519
1991 – 921992007 – 08551
1992 – 932232008 – 09582
1993 – 942442009 – 10632
1994 – 952592010 – 11711
1995 – 962812011 – 12785
1996 – 973052012-13852
 2013-20149392014 – 20151024

Cost Inflation Index – Chart showing Change of Rate

The increase in cost inflation rate has shown in the chart below.

Cost inflation Index 1981 to 2014-2015

Comments

  1. Darpan Patel says

    Hello,

    Thanks for useful information. I’m currently looking for a cost of inflation index value for the year 1967-68. Would you be able to retrieve this data?

    • Anup Mukherjee says

      Inflation index was not applicable for 1967-68. You have to estimate the market value in 1981 and apply the index of 100 on that.

  2. Nihar Pal says

    Sir,
    I have 2 FMP-Debt Funds maturing this financial yr 2014-15. They are for 1095 days. My query is will these FMP be eligible for LTCG under the new rules governing Cap gains?
    Thank u
    Nihar

  3. Balaji says

    Few Questions with respect to this:

    1) What is meant by Cost of Property? Is it the purchase price of the property by itself (or) Can Stamp Duty + Registration be added to calculate the same? (since they were cost to the buyer while purchasing the property)

    2) In my situation, the bank loan is not closed with a few lakhs remaining. I want to sell the property if a proper buyer approaches. In this case bank will only return the money after deducting the reminder of loan. Since that being the case, What will be the selling price of the property? Is that the actual selling price (or) the amount that is left in my bank account after the loan reminder is deducted by the bank

    Please do let me know. Thanks.

  4. D N SHAH says

    My father purchased a residential property in 1969 for RS 98,000.00 He passed away in 2012 June & now the house is in joint names of we two brothers 50 % each. now we plan to sell this property for RS 18.5 Cr. what will be rate able value of this property & if we both buy separate house for say about 6 Cr each what will be capital gain applicable.

    • Sudeep says

      Dear Shah,

      You have to get the that property valued by registered officer as on 01.04.1981. Suppose the authority says the value of the said property on 1.4.1981 was nearly 10,00,000/- then your cost would be 1000000/100*1024=93,90000 and your sale vale is 13.5 crores.

      Capital gain is about 12.5 crore and individually it is 6.25 crores. you can invest in new property and avail the exemption u/s 54 provided you dont have more than 2 houses including the new one.

      [In order to protect the privacy of our users a Phone Number or Email Id is removed from this comment]

  5. sakshi says

    purchased a property and the installments paid are 5/95- 15000, 2/96-65000,8/96-64000,12/97-48000,4/98-73600,10/98-57600,5/00-80000 so total is – 402200…sold on 20/06/2014- 5600000.
    please let me knw long term capital gain and tax…thanx

    • harisha says

      My father bought a site in 1972 for Rs.2000/-(actual registered price is Rs.500). He died in 1975. Mutation was done in one of the three brothers name(A). This land was sold in FY 2014-15 for Rs.4000000/-, Entire sale proceeds are utilised by the son in whose name the propery is mutationed(i.e.A) as A. The sale Deed mentions the sellers name as A. The other two brothers do not wish to claim the share in sale amount.. My query is:

      whether I can purchase a new property in my individual capacity and claim deduction of entire capital gain arising on sale of said land.

  6. debashis ghosh says

    Purchased a flat for investment purpose and recently got possession of the same. What would be the date of acquisition ? Date of allotment or date of possession or date of registration [yet to be done]

  7. krishna says

    purchased a land in 1982 and constructed a house in 1995 but don’t have any bills of constrcution and sold this property in 2009 for 21 lakhs. How can we calcite price of acquisition and capital gain tax. Please advice.

  8. Vivek says

    Hi,
    I have bought a property for 2990000/- and paid 265000 for registration and invested 350000 for wood work in year oct-2006.
    Now I am selling it at 8100000 (1% TDS deduction so selling at 8019000/- and 50000 agent fees as brokrage.
    Please let me know how much will be my capital gain tax.

    I am planning to buy another property in next 4-5 months hence please let me know how long I can hold my money and not to pay tax.

    many thanks in advance
    thanks
    Vivek

    • ramesh p says

      I booked flat in march 2007 . got possession in october 2009 . cost of flat Rs.29.92 lacs +registration exp Rs.1.62 lacs +
      other exp. like mseb ,security deposit ,soc ,charges total rs.1.17 lacs (.55+..51+.11 ). further spent on modernising of kitchen and flooring costing Rs. 2/- lacs.( bills not available ) . Now I have a purcheser for Rs. 80/ lacs. what will be my capital gain if I sell. flat is in two names 1st name is of me wife and 2nd is mine. If we use entire capital gain amount in paying to developer for a flat already booked in oct 2010 ( in the names of my wife and myself ) and possession of same is expected in 2018 can it be allowed .
      Thanks in anticipation of early reply .

  9. Suresh says

    I bought a flat for 27 lakhs in May 2009 and now I am planning to sell for 38 lakh. How much do i need to pay as tax?

    • Ritesh says

      NIL. as Indexed cost of acquisition is Rs 43.75L and sales price is 38L so Long term capital loss is Rs 5.75L.

      • Vipin says

        I think you can help me! I bought a residential plot land in 2002-03 for Rs. 2 Lakhs. I sold it in 2014-15 at 16 Lakhs. Further I bought a residential land for Rs. 10 Lakhs from the sale proceeds. Can the capital gains be set-off against new land purchase else what is my liability.

        • mahadev somappa masaguppi says

          I had Purchased open plot on 18 day of Dec. 2010, for Rs. 240000/- constructed building on the same plot by spending Rs. 800000/- now i am selling the ground floor for Rs. 1500000/- i remain in the 1st floor. what is the capital gain & what is the Tax . i am selling the same property in the month of jully 2014

  10. maithreyi says

    150000-(76550/632*939)=36265. Its a long term capital gains since the period of holding is more than 3 years. Tax amount is 36265*20/100=7253. If your income from all the other sources is less than Rs. 200000(BEL) you can set off the amount.

  11. raja says

    i purchased a plot in year feb., 1994 for Rs. 40,000 & sold it on feb., 2009 for Rs. 400000, what will be capital gain?

  12. Sridhar says

    Hii,

    I purchased a House in 1995 at 3.15 lacs and sold same in 2013-14 at 86 lacs.
    From that amount in the same year 2013-14 I purchased a flat at 25 lacs semi-finished (registered value)& a 19 lacs amount was spent on completion & Interior.
    my queries are ;
    1. What would be my capital gain when cii on purchase is 259 & CII sale is 939.

    Please help
    regards
    Sridhar

    • maithreyi says

      8600000-(315000/259*939)-4400000=3057973
      this is covered exemptions under section 54 of income tax act.

      • santhoshkumar says

        please explain 8600000 – ica (1142027)- invest 4400000 then taxable cg will be 3057973 is it..?

    • Anis Mohiuddin says

      What kind of documentation is acceptable to IT against expenses like ‘renovation’, completion of flat, interior works etc. so as to qualify for exemption? Or do they want just a statement of expenses without any pucca receipt particularly for labour charges, transportation of goods etc.?

      Please guide.

  13. K A Patil says

    Dear Sir,
    My daughter had purchased a Residential Site 50 X 80 = 4000 Sft on 9 December 1993 for a sum of Rs 1,50,000.00. She was an Indian Citizen at that time. Subsequently she moved to the US and is now a US Citizen.
    She intends to sell this property next month & is likely to get a Total price of Rs 1,60,00,000. (Rs 1 Crore, Sixty Lakhs). She has no intention to reinvest the proceeds & wants to repatriate the same to USA.
    Please advise on following:(1) How much will be the Capital Gain Tax that she has to pay.
    (2) Whether she can deduct property sale & other related expenses like Brokerage, Sale deed cost, expenses incurred on the Corporation Property Taxes paid during last 20 years also expenses on its periodical cleaning and watch / ward etc
    An advise will be appriciated lease
    Sincerely Yours
    K A Patil

  14. chandrakant says

    If I invest a capital gain from sale of residential house into the purchase of Agriculture land within Municipal Corporation or outside municipal corporation and build a farm house. Is the same exempt from capital gains tax.

    Also if tax is payable what is the % of tax payable as capital gain tax.

  15. Vijay Kumar says

    I had purchased a semi-finished house from a housing society Rs. 4.4 lacs. The amount was paid in installment in 2003-2004. as shown below:-
    01 Aug 2003 Booking Amount – 10,000
    04 Aug 2003 1st Installment amount – 1,50,000
    14 Aug 2003 2nd Installment amount – 73,000
    12 Jan 2004 3rd Installment amount- 1,00,000 Paid By HDFC Bank against Home Loan
    19 Jan 2004 3rd Installment amount- 1,00,000 Paid By HDFC Bank against Home Loan
    20 Mar 2004 Final Balance amount – 7,000 24 Mar 2004 Possession allotment
    Apr to Jul 2004 Expanses on Finishing – 2,10,000
    2005-2006 Cost of improvement of 1st floor- 3,50,000 3 lacs Paid By HDFC Bank new loan
    22 Nov 2012 Stamp Duty, Registration Fees and Legal Expenses- 75,000
    01 Dec 2012 to 31 Mar 2013 Cost of improvement of 2nd floor- 5,25,000
    Total Cost 16 Lacs and HDFC Bank Home Loan Balance 2.7 Lacs
    If I sell the house Apr 2014 on Rs. 30 Lacs and 2.7 lacs loan prepaid to HDFC Bank then how much long term capital gains?

  16. Smita says

    Dear Sir/ Madam,

    I am NRI and I have purchased property in 2006 for Rs. 3,000,000.00 as per CII 30L*(939/519) = 5,427,745.66
    Capital Gain will be around 2,427,745.66. I understand that to avoid tax on capital gain I need to invest this amount in new property. Here my question is do I need to provide this investment related documents to income tax. And also please help me to provide more details from NRI perspective.
    Thanks

    • Joshua says

      Dear Friend,
      Capital Gain is calculated only when you sell the property.. And the capital gain will be Sale Price minus the Indexed Cost.. For example if you sell the Property for 6,000,000, then your Capital Gain will be 572,255 (6,000,000 – 5,427,745). And in case if you sell the property for 5,000,000 you wont get any capital gain.. If you have capital gain you need to invest them in a property or you can deposit the money in a capital gain account scheme at a bank recognized by the Government of India..

  17. sunil jain says

    i(individual)purchased land in rs.8000/-only in 1969 & constructed house on this land in 1970. i have no records for construction cost. now i m selling this property in rs 100 lacks in F.Y.2013-14. how much make long term capital gain tax & how? i need method with example as step by step.
    thanks

  18. Ilyas says

    Hi,

    I purchased a property in Nov, 2012 at a price (86L) more then the property (1st house) I sold at(63L) in Jan, 2014. Will i be still liable to pay capital gain tax or covered under the property I purchased a year back?

    please advice.

    thanks

  19. vijay says

    i take a 400 sq ft land cum shop @100000/ i sell @525000/ what is my long term capital gain tax how i avoiding it by purchasing bond

  20. Sameer N says

    Hello,

    Purchased apartment in Aug 2003 for 7,00,000
    Sold Apartment in March 2011 for 29,00,000

    Entire amount in Capital Gains Saving Account since July 2011

    Considering CII, I have calculated the Capital Gains Tax to be paid = 2,37,365

    Can this tax be saved if I
    1) Invest in an under construction apartment to be completed only by 2015?
    2) In a villa, where Land registration will be done by Feb 2014 and priced at 30,00,000
    Construction of villa will be completed by Aug 2014?
    3) Buying only a plot of land worth 20,00,000

    Or is there any other way to save the tax, say, by now investing into relevant bonds?

    Thanks

    Sameer

  21. Laxmi says

    Capital gain (Indexed) = 4900000 – Tax@20% 9,80,000
    Capital gain (Non Indexed) = 6300000 – tax@10% 6,30,000

    I want to know, whether i can buy a flat for 4900000(using indexation) or should i be buying a flat for 6300000 to avoid capital gain taxation?

    Many Thanks

  22. ramesh says

    my father sold gold jwellary inherited from his parents in 2010 without taking bills. can we calculate capital gain tax on this. pls advise.

  23. Dhaval Shah says

    Sir,

    I sold a flat in Jan 2014 at 31.5 lacs which I purchased in Dec 2010 @ Rs. 15.45 lacs in Baroda. Will you please adivse me what amount shall I consider for capital gain.

    Dhaval Shah

    • Monil says

      Hello,
      your cost of aquisation Rs. 15.45L is equivalent to Rs. 20,40,443 in 2013. So your capital gain would be Rs. 11,09,557.

      Monil

  24. Bas says

    Hello, my parents bought a flat in 1996 for about 10 lacs and spent about 4 lacs doing it up at the time. Both parents passed away and I inherited the flat which I have just sold for 44 lacs this year in 2013. What is my taxable capital gain ? And is iit the amount of the gain that can be invested in bonds and what time frame do I need to invest in bonds from time of sale of property? Any assistance you can provide will be very helpful.

    Thanks and best regards
    Bas

    • ani says

      If bought after march 1996 and sold after march 2013…305/- in 1996 is 939/- in 2013 as per index. so you can calculated what 10 lacs then is what amount in your selling year. 4 lacs extra work won’t get you anything unless you have the original bills. Profit calculated this way can be invested in another property within 6 months of selling or invested in infra bonds for 10 years i believe.

  25. Suresh Prakash Kabra says

    Sir,
    I have purchased MF for Rs 300000/- on 25 Jan 2011 & sold them on 31 dec 2012 for Rs 339507/-.
    Another set of MF were purchased on 28 Jan 2011 & sold on 12 Oct 2012 for Rs 222277/-.
    What will be the capital gain tax with indexation?

    • manikandan says

      Friend first of all your sales is not of long term asset
      Becouse indexation is only for long term asset
      which means you should keep the asset for more than
      36 months
      here ur asset is is short term so capital gain for 1st mf is
      39507

  26. deepak says

    Hi sir my mother has purchased one house in 1978 with rs.18000 in 2010 she was expired my father also expired now we are total three owners of the house myself and two sisters now I have to sell this house in this year at rs.1500000 this amount distributed among us in three equal part how much tax I have to pay as capital gain

  27. Thomas says

    Hi,

    Please let me know the Inflation indexed capital gain for a property which was purchased in 2010 and sold in 2013.

    Date of purchase : 08-Nov-2010 purchase value : 80 Lakhs. Renovation expense : 4.4 Lakhs.

    Date of Sale : 22-Nov-2013 Sale value : 1.05 Crore
    Selling cost : 1 Lakh.
    Based on your updates, if indexation is applied , no capital gain. Please advise.

    • ani says

      Correct. Your 80 lacs is equivalent to 10565400.84 in 2013. You can show cost of acquisition as 84.4 lacs only if u have the original bills.

      Without the bills also you can show a loss from property of 565400.84.

  28. Suresh says

    I purchased land in Jan’1984 at jodhpur (Rajasthan) Rs.10,000/- and sold in oct.13
    In 25lacs.
    Kindly inform the amount of capital gain tax with calculations and amount for which i have to purchase tax saving bonds.

    • Pranav says

      Capital gain will be as follows
      Sale Consideration 2500000
      Less: Indexed cost of Acquisition 80948
      So Long Term Capital Gain will Be 24,19,052
      And Tax on the same will be Flat @ 20% Rs. 4,83,810/-

      • Nitin Gupta says

        Hi, request a clarification that in this case how much money needs to be deposited in bonds to avail exemption on tax? Is it the amount equivalent to gain or tax?

    • jugal kishor sud says

      Purchased a plot for Rs: 20,000/- during the year 1985-86 and sold the same plot for Rs:9.00,000/- in the year 2013-14. Kindly calculate the capital gain.

  29. Sudha says

    Sir, when equity shares purchased during the the year 1985 and sold in 2013 can have the benifit of indexation,why not debentures purchased and sold during the respective periods??

  30. MP says

    My mother & brother have jointly purchased an apartment in April which was registered at the guidance value of 30 lacs although the actual purchase price was 68 lacs (with loan of 50 lacs).
    My Mother plans to sell her house in november for 86 lacs which was purchased for 7 lacs in Oct 1991.
    When offsetting the long term capital gains on sale of the house against purchase of the apartment, do we have to consider the registration value of the apartment (30 lacs) or the actual purchase price (68 lacs)?

  31. jayesh says

    Dear sir,

    my query is old gold jewellery purchase in 1-03-1971 of 3000grm rate of 10200/- per 10 grm. amt is 3060000/- that all gold jewellery sale in the f.y 2013-14 date 12-09-2013 in rate of 30150/- amt rs.9045000/- so how to calculate Index cost of aquisition amount.

    plese solve the my query.

  32. venkatesh says

    how is the indexation done for a property purchased in 1974-75 and sold in 2013-14?

    say the purchase price was 30,000 and selling price was 65,00,000? pl revert on the approx tax liability if 35,00,000 was reinvested in a new house.

    also is there a benefit for a senior citizen?

    • Atharv Apte says

      you 1st need to find out the fair market value of the house in the prev year 81-82. You have the option to consider fair market value or actual cost as the cost of acquisition (I would suggest take higher of the 2 amounts as it would lower your tax burden). Then use this formula: Cost of acquisition*(CFI in 13-14/CFI in 81-82).
      Subtract it from your net sale consideration and you would get your capital gain.U/S 54 If u have reinvested in another property a year ago or within 3 years you would get exemption for the invested amount upto the limit of your capital gain or if the capital gain is more than re-investment then for the whole value (35,00,000 as you said).

    • vignesh iyer says

      first computation of capital gain will be done
      74-75 will be considered at mp during 1980-81 or cost whichever is higher
      so if suppose mp at 1980-81 was 45000 then
      cost(rs 30000) or mp on 80-81(45000) higher of this is taken
      and then fy 13-14
      45000*index value of ay 14-15(presume 1000)/100
      will b indexation cost

  33. Rajan says

    Sir,
    My Grand father bought a house in Apr 1951 @ Rs 10,000.
    Now, I want to sell it on Oct 2013 for Rs 14 Crors.

    What will be the capital gain amount..?
    Which Cost Inflation Index of the year Should be Taken?

    Thanks

  34. MANISH T says

    Sir
    I had bought a house in Apr 2005 @ Rs 13lakhs.
    Now, I want to sell it on 08 Oct 2013 for Rs 24Lakhs.
    As per my calculation my LTCG is Rs 1,55,493/-
    Can u plz tell if it is correct?
    And also the procedure of informing IT department about utilisation of this amount.
    Thanks

    • Yogendra says

      Hi,
      You need to consider CII for year 2005-06 and 2013-14.
      Based on this consideration there is -ve capital gain in this sale. If you have some other LTCG, then you can setoff same with this -ve value or discuss with your CA for more options.

    • ASA investment says

      Dear Manish

      The fair value of your property as per cost indexation is 24.56 Lakhs which you have sold to 24 lakhs.There is no capital gain & hence you need not to pay any tax on it.

    • DS Sajwan says

      Dear Manish,

      Purchase Value=13 Lakh
      Sale Value=24 Lakh

      Capital Gain=13 Lakh*939/497=24.56 Lakh

      So you dont have to pay any tax

  35. Sanjay says

    if i invest in property in March 2013 and sell it in April 2015, will it be considered 3 years ( financial year 2012-13 to 2015-16)? does cost inlation index is same for the whole year whether asset is gained in April or next year march..does not matter.

    • Yogendra says

      on April 2016, 3 years will be completed. And if you sale in April 2016, then FY 2012-13 and 2016-17 shall be considered.

  36. lokesh says

    I purchased a flat in 2002-3 at 5 lacs and sold same in 2013-14 at 22 lacs against a home loan.
    In 2011-12 I purchased a flat at 25 lacs(registry value) with a 25 lacs loan with an annual interest+principle outgo of 3.43 lacs pa.

    my queries are ;
    1. Can i show nil capital gain tax adjusting the capital gain against my earlier purchase.
    2. If not, can I adjust my loan outgo against the capital gain

    Please help

    regards
    lokesh

    • CA Akash Singhai says

      Hello

      Lokesh as per the Income Tax act, you can save your capital gain tax by investing adequate amount in another House Property either 1 year before sale or 2/3 year after sale by purchase/construct respectively.
      In your case you bought another flat on 11-12 which is 2 year before the current sale, hence you do not fall under the said clause for saving capital gain tax.
      However still you can make investment for atleast 22-10.5(Indexed cost value)=11.5L in another property to save 100% tax on your gain.

      Secondly your loan outgo has two parts Int+Principal, you can claim Int as house property loss upto the payment of Rs.150000 per annum and payment of Principal u/s 80C upto the cap of Rs.100000. These payments can be settled with any head of your income every year.

      Hope this could solve your queries.

      Akash

  37. chirag gajera says

    Dear Sir,
    I have cii for year 2013-14 but ‘index cost of acquisition’ to needed so i requet for you.

  38. Partha says

    Hello,

    I would like to know about short term capital gains.

    I have a flat already in my wife’s name and we’ve purchased another flat in joint name by taking loan from LIC. My queries are as below:

    The previous property was purchased as on 24th March, 2009 (Date of allottment) and took possession on (25/02/2012).

    The said property is still not registered.

    On 9th February,2013 we’ve purchased another flat and the registration and mutation has been done for this one. This has been purchased by taking loan from LIC.

    Now my questions are as below:

    1. We want to sell the first flat which is in my wife’s name by way of transferring the name through the developer by paying a 3% of transfer charges to them. We are taking tax relief on Interest on loan paid and Principal paid on 50% basis as there is a joint ownsership for the newly purchased flat. Can we take tax relief on the sale proceed as per section 54 or 54F on capital gains.

    Say the cost of the first flat is as below:

    Rs. 1,00,000 for Flat
    Rs. 20,000 for Car parking
    Rs. 1000 for Service Tax
    Rs. 500 for Installation of the electricicty
    Total=Rs.1,21,500

    Total Sale Amount Say Rs. 5,00,000
    Transfer Charges Less Rs. 15,000
    Net Amount = Rs. 4,85,000

    1.Here my question is what will be my Capital gains part:
    Rs. 4,85,000-1,21,500
    or the calculation is not correct? Is there any other component I can add on?
    2. As I have already purchased another flat with higher amount say Rs. 10,00,000 and can we adjust the capital gain amount from the newly purchased flat. As the previous flat was in the name of my wife only what amount we can adjust towards the capital gain amount against the cost of the newly purchaed flat and under which section.Also cost of the newly purchaed flat would be amount as per deed of conveyance, registration charges and mutation charges or any other I can include.
    3. By when we need to complete the sale process for adjusting the capital gains part as that has been purchsed during the previous financial year(2012-2013).
    4. For adjusting the capital gains do we need to repay loan principal or only the purchasing of new flat will suffice. What documents would be required to subit to get this tax relief for both the old flat and new flat?

  39. Himmat says

    Dear Sir,

    In regards to a inherited property, can you please explain from which date the property gain tax will be applied from?

    For example, my house was build in 1984 on a agricultural property bought in 60’s. My gradfather passed away in 2000. Now I would like to know that if my father is to sell the property, let’s say in 2014, then from which date will the property gain tax will be applied from?

    a) The date my grandfather passed away OR
    b) The date the land was legally transferred on my father’s name? (in this case 2013) OR
    c) The date property was bought in 60’s?

    Your help will be greatly appreciated.

    Thanks!

    • Joshua says

      Hi Himmat,

      When an asset is acquired by gift, will, Succession , inheritance or the asset is acquired at the time of partition of family [….].. , the period for which the asset was held by the previous owner should be included..

      Here the Previous Owner is your Grand Father, so the date of acquisition of Land will be the year 1960. But for indexation purpose you must estimate the fair market value of the Land as on 1st April, 1981.

      The cost of Building will be the Cost of Improvement.

  40. says

    I own a flat since 1999. I purchased another flat in 2009 which was under construction. I had taken a loan of 30 lac for purchase of 2nd flat. The 2nd flat is going to be completed and I will take possession in a months time. Can I sell my flat puchased in 1999 and repay Rs 30 lac home loan and claim exemption from Capital gains tax for the said amount.

  41. Durai says

    Whether LTCG capital gain invested for a new flat in my son’s name will be eligible for exemption under section 54. If not what will be the tax I have to pay if my investment in 1989 is Rs.300,000.00 and the sale proceeds of the flats that I would sell by Sept 13 would be approximately Rs.50,00,000.00.
    Thanks in advance
    Durai

  42. Sangita Singh says

    Yes no doubt indexation benefits will be applicable in case of long term capital gain and not for short term capital gain. For long term capital gain the period of holding must exceed 3 years but in case of share period of holding must exceed 12 months only.

    Therefore conclusion is that if your assets is share and you are selling it after 12 months then you will get indexation benefit and in case of other assets you will get indexation benefit only selling after 3 years.

    • Satyajit Bose says

      Madam,
      As per my knowledge, shares bought by STT paid. Which is completely Income Tax free. All LTCG (STT paid) are such.
      Therefore, no need of indexation for LTCG in shares.

  43. Ashok says

    Sir
    i had sold a property in which land is inherited by me since 1980’s and villa constructed on it in 2011 completed in 2012 and totally sold in sep. 2012. Can i show LTCG for land and STCG for building. And for building can i claim cost of acquisition/improvement as my construction cost?

    Please guide me.

  44. V K Singh says

    I had purchased a flat from AWHO in 2002 for a sum of
    Rs 12.75 lacs. The amount was paid in installments between 1997 and 2002 as shown below:-

    Feb 1999 Regn. fee (incl. interest – 28,866

    5 Aug 97 50% of land cost – 1,00,000

    5 Nov 97 50% of land cost – 1,00,000

    5 Feb 98 Additional land cost – 37,300

    5 May 99 15% cost of DU – 1,35,000

    5 Nov 99 20% cost of DU – 2,18,500

    5 May 00 20% cost of DU – 2,18,500

    7 Nov 00 20% cost of DU – 2,18,500

    5 Jul 01 20% cost of DU – 2,18,500
    ————————————————————————————————————
    Total 12,75,166

    If I sell the house now, what will be the indexed cost? how much long term capital gains will I have to pay? I am planning to build an additional floor in the house in which I live. What is the minimum amount I should spend on this to avoid LTCG Tax?

  45. Shail says

    I bought an apartment in 2007 Dec for around 56 lacs.
    Also, got the possession/registration in 2011 Feb .. do I understand correctly :
    – 3 years term ends in 2014 Feb and after that LTCG can be applied?
    – CII is to be used for 2007 Dec as I have been paying loans etc to banks based on the prices/interest rates then. Not based on 2011 prices when I got the possesion

  46. Prakash Vohra says

    I have sold shares on 1st April 2013. I believe CII applicable to Capital gain arising out of this this sale is 939. Is this correct? Please guide.

  47. AA says

    Does Section 54EC apply to former citizens of India? The situation is that the person is no longer a citizen of India, but owns residential property to sell in India. Also, it seems the seller cannot own any other property – This person does not own any property in India.
    Can he/she avoid Income taxes on Capital Gains by using Section 54EC to invest in bonds even though they do own property outside of India?
    Also, at the time of completing the transaction, it seems like tax will be deducted at source at 20%. Is that on the sale value or the net Capital Gains?

    THANKS,
    aa

  48. SET says

    Please correct me if wrong. I heard the indexation for the financial year 13-14 is 939. Infact I also want to know if this is correct. Pls reply

  49. Amogh says

    I bought a flat in march 05 for 46 Lakhs inclusive of stamp duty reg. i sold it in dec 2012 for 1 crore. i would like to do the cost indexation for this and put the gains in an REC bond. could someone help me calculate an approximate value for investing into this bond?

    • Hardik says

      Unless u r taking any other deduction u/s 54 ur capital gain will come around 1835000. 1cr – ((46 Lakhs*852)/480).
      i.e 10000000 – 8165000 = 1835000. So dis will b the amount u would have to deposit in RCE bonds to avoid payment of capital gain tax which will be in for a lock in period of 3 years.

        • Joshua says

          480 is the Cost inflation Index for the Financial Year 2004 – 2005 (The year when he purchased the Asset) . The 852 is the CII for the Financial year 2012 – 2013 (The year he sold the Asset).

  50. Anil says

    Can you please let me know where to lookup the cost of inflation index for manufactured automotive parts in india

  51. HEMANT J. SHETH says

    How to calculate cost inflation index if property purchased before year 1981 when 1st CII DECLARED? MEANS I PURCHASED PROPERTY IN YEAR 1971 & SALE NOW. THEN HOW TO CALCULATE LONG TERM GAIN?

    • Hemant Seth says

      I purchased a house in Ahmedabad in 1971 for Rs 23000. And sold it at Rs 15 lacs in May 2013. Do I have to pay any capital gain tax on this.

      • Joshua says

        [The comment is Updated]
        Friend,
        For Properties Purchased before 1981 the Cost Inflation Index of the year 1981 Should be Taken.

        For your Second Question, the CII for FY 2013-2014 has not yet been declared by the Government as you will be paying tax on this transaction next year only.

        Update: CII for the Financial year 2013-2014 is declared. The CII is 939.

        Indexed Cost of Acquisition : Rs.23000 X 939/100 = Rs. 215970
        Your Capital Gain will be Rs.1500000 – 215970 = Rs.1284030

        • Hardik says

          1981 Value of the property is to b found out first and than if its greater than the acquisition cost than indexation is taken on the 1981 value hence decreasing ur capital gain.

      • ASHOK KUMAR says

        I PURCHASED A PROPERTY IN DELHI IN 1993 FOR RS.50500.AND SOLD IT AT RS 720000. IN APRIL 2012. DO I HAVE TO PAY ANY CAPITAL GAIN TAX ON THIS . IF YES COMPUTE MY LONG TERM CAPITAL GAIN TAX.

  52. Swarupa Y says

    What is 2013-14 CII and what should be the amount to be reinvested if the calculations are made with indexation and the capital gain is 42 lacs and tax is 20% i.e. 8,40,000 – question: what should be the investment if need to save on capital tax?

  53. K Chennubotlu says

    I purchased a residential house in the year 1989 for Rs.2,00,000/- and let it out the same till 2013. In April 2013 I executed a partition deed/ settlement deed, dividing the house in to five equal parts one each to my three sons and one each to myself and my wife. In May 2013 all five of us jointly sold the house and realised a consolidasted capital gains of Rs.1.50 crores. Can this capital gains can be shown @ 30 lacs each to each of the five persons. And If all of us invest individually Rs.30 lacs in specified assets u/s 54EC can we escape the capital gains. Kindly reply
    thanking you

  54. Sandeep S says

    Deal Friend,
    My query is: Is this CII chart only applicable for Long term Capital gains or short term too?
    I mean if I sell my property before 3 years will this CII comes into existence or it would be flat % deduction as per my salary bracket?
    Please help me!
    Thanks in Advance

    • Anne Jose says

      The benefits of indexation (CII) is applicable only to Long Term Capital Assets. Short term capital gains (Without indexation) except shares will be taxed at usual slab rates in case of an individual.

  55. Vani Rai says

    But Sir,
    Agricultural lands situated within the specified limits(8 km.) from municipal corporation , if sold, the capital gains so arising are Taxable !

    • Joshua says

      Dear Friend,
      You are right. And Such Municipality or cantonment board must have have a population of 10000 or more according to the latest census. And I also forgot to mention that Agricultural Lands Sold for Non Agricultural Purpose will be treated as capital Asset and it is clarified in the case Sarifa Bibi Mohamed Ibrahim & others 204 ITR 631 (SC).

      • Vani Rai says

        Dear Sir,
        WE have an agricultural property which is situated exactly at 8 kms distance from muncipal corporation(population almost 10000). We are now planning to sell the property. Could u please specify if the sale proceeds so obtained would be taxable or not.
        Thanks & Regards

        • Joshua says

          If your property is situated at exactly at 8kms distance then you can claim it as an agricultural Property.

          For your Note the distance from the municipal area is to be measured by approach road and not as per straight line distance on a horizontal plane or as per crow’s flight (Held in the case CIT, Ludhiana Vs Sh Satinder Pal Singh 188 Taxman 54 P&H).

    • Joshua says

      Dear Friend,
      Cost Inflation Index for Assessment Year 2013-2014 is 852. What we have given in the Chart are Financial Years. Financial Year 2012-13 means Assessment Year 2013-14.
      Update: CII for the Financial year 2013-2014 is 939.

    • SUJAYAN Nair says

      Dear Sir

      I want to know about with is the index cost for capital gain for the financial year 2013-2014.

      Your prompt reply is highly appreciated

    • Joshua says

      Dear Friend,
      Cost Inflation Index for Assessment Year 2013-2014 is 852. What we have given in the Chart are Financial Years. Financial Year 2012-13 means Assessment Year 2013-14.

  56. rajesh says

    i bought a agriculture land of Rs 2 lakhs in 2009 and sold in 2012 in 5 lakhs.I invested these 5 lakhs rs to another property .i want to show the gain the long term capital gain .
    need to know how to show this and what are the property documents required.

        • Joshua says

          Dear Friend,
          Section 2(14) of the Income Tax Act, 1961, excludes rural agricultural land in India from the definition of Capital Asset. Transfer of Capital Assets only results in Capital Gain. Hence Agricultural Lands are Exempted from Capital Gains.

          • Vani Rai says

            But Sir,
            Agricultural land situated within the specified limits(8 km.) from municipal corporation , if sold, the capital gains so arising are Taxable !

          • Joshua says

            Dear Friend,
            You are right. And Such Municipality or cantonment board must have have a population of 10000 or more according to the latest census. And I also forgot to mention that Agricultural Lands Sold for Non Agricultural Purpose will be treated as capital Asset and it is clarified in the case Sarifa Bibi Mohamed Ibrahim & others 204 ITR 631 (SC).

  57. Adarsh Mohan says

    Dear Sir

    Thanks for making me understand the indexation. I shall be further obiliged if you may kindly elobrate following doubts

    1 What shall be the date of investment for property if payment is staggered?
    2 What shall be the date of investment for property if completion is on a later date?

    Thanks and best regards

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