Cost Inflation Index – Capital Gain

Cost Inflation index for the Financial Year 2017-2018 has been announced to be 272

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, 2001, whichever is later.

Cost Inflation Index (Revised) – From 2001

The revised rates will be applicable from 1st April 2018 and from assessment year 2018-19 onwards..

Financial YearCost Inflation IndexFinancial YearCost Inflation Index
2001 – 021002010 – 11167
2002 – 031052011 – 12184
2003 – 041092012 – 13200
2004 – 051132013 – 14220
2005 – 061172014 – 15240
2006 – 071222015 – 16254
2007 – 081292016 – 17264
2008 – 091372017 – 18272
2009 – 10148

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 – 821001999 – 00389
1982 – 831092000 – 01406
1983 – 841162001 – 02426
1984 – 851252002 – 03447
1985 – 861332003 – 04463
1986 – 871402004 – 05480
1987 – 881502005 – 06497
1988 – 891612006 – 07519
1989 – 901722007 – 08551
1990 – 911822008 – 09582
1991 – 921992009 – 10632
1992 – 932232010 – 11711
1993 – 942442011 – 12785
1994 – 952592012 – 13852
1995 – 962812013 – 14939
1996 – 973052014 – 151024
1997 – 983312015 – 161081
1998 – 99351 2016 – 17 1125

Cost Inflation Index – Chart showing Change of Rate

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

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201 Comments on "Cost Inflation Index – Capital Gain"

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Guest

My mom has sold a plot and she is transferring the entire amount for me to construct a house whose plot is registered in my name. So should my mom have to pay tax for the capital gains?

Guest

I have purchased a plot on 20-10-2005 and sold on 22-08-2016. When I purchased circle rate was 400/- & whom sold rate was 1900- profit was Rs 1500- per sq MTR total lot area was 120 Mt . Total project 1,80,000. Please calculate my taxable amount I am in 20/’ percentage slab

Guest

flat purchased in delhi 1989 for 2.5 lac. sold in 2017 for 85lac. whats the Capital gain? as per new norms all properties purchased before 2001 would have to take index of 2001 as base yr. so is it that the property is first indexed from 1989 to 2001 (to arrive at the FMV considering the inflation) and then again it is indexed from 2001( base yr.)till 2017(sale yr.) ??

Guest

For inherited property of 1991 bought for 3 lacs not sold on 31st may 2017 for 90 lacs what will be the indexation calculation?

Guest

How to know the market fair value as on 01.04.2001 of Flat purchased in 1994-95 so as to calculate indexed capital gain for sale in 2017-18

Guest

I purchased a 2BHK flat in 1987 at cost of Rs 1,06000. Now I want sale it at cost of Rs 32.5 lakhs.
I have two questions to asked:
1. which CII table to be used for calculation of LTCG tax i e 1981-2017 (old ) or new which introduced in this FY i e 2001-2017.
2. My tenure for holding property covers both tables i e 1987 to 2017.

Please advise me at your earliest.

Guest

The revised rates as mentioned by you is from 01/04/2018. Shouldn’t is be applicable from 01/04/2017

Guest

It was applicable from the date of 01/04/2017 i.e, computation of income is taxable in the Assessment year 2018-19.

Guest

Please comment on calculation of indexing 1956 purchased property for Rs.1000/- now being sold for Rs.2.9crores.

Guest

Give me details regarding cost of improvement on the asset after 01/04/1981. then i will ascertained.

Editor

For properties sold upto 31.03.2017,
Index of 1981 should be taken as index value for property purchased upto 01.04.1981

Guest

Full consideration of House paid in 2004, Possession given in 2005, Registration done in 2010 . Please let me know from which date to calculate indexed cost of acquisition (purchase) . Thanks

Guest

How to calculate capital gain

Guest

Sir,my uncle purchased a flat on august 2010 of Rs-392000 and sold on sep 2016 of Rs-1400000.so please tell me long term cap.gain and short term cap. gain and tax of this property. if possible send me calculated figurs for the same on email anup.das.vet@gmail.com

Guest

It is described very simple way any time you read this article you can clear your doubt about cost inflation index

Guest

If a house purchased in Jan 2013 for 8 lakhs and availed bank loan of 20 lakhs for construction (loan amount was paid to seller by bank), paid 10 lakhs to bank in last rears including 1.2 lakhs principle amount. If the property was sold for 51 lakhs in Jan 2017. Pse calculate the tax to be paid.

Guest
Subhash Chandra Singh

very useful information sharing to understand Capital Gain Value

Guest

fully pursue and explain clearly about the capital gains

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