Cost Inflation Index – Capital Gain

Cost Inflation index for the Financial Year 2016-2017 has been announced to be 1125

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 – 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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190 Comments on "Cost Inflation Index – Capital Gain"

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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

Guest

i have purchased a flat in the year 2004 for rs3.5 lakhs now am selling 17.5 lakhs is there tax to be paid on this

Guest

purchase land 1992 @1200/-per viswa

Guest

why is the cost inflation index prior to 1981 not shown. so how is the tax caluclated on the property which is bought prior to 1980 and sold in 2005. can u help me

Guest

What is purchases for that time

Guest
veeresh bangarshettar

Veeresh, I am selling the commercial open land of 1500sqft.which I got from my grandfather purchased in 1978,40,000sqft for approximately 10000/,now I am selling it for 10lk.and thinking of purchasing of agricultural land in rural area, so what will be the capital gain tax that I have to pay.

Guest

I Bought a small flat in 2001 in 202015rs. Now after an order of supreme court the flat is demolished by regional authority and on supreme court order I received a compentation of 220200 rs. Kindly inlight me if compentation money will attaract capital gain if yes what is the amount I need to invent in capital bond and how? My mail id “sumita704@gmail.com”

Guest

DEar sir,
i have purchase a 2bhk for 2.95 + approx 0.5 for registration and water+ eb connection etc. in the financial year 2001-02. now i am going to sell the house for a sum of 34lacs.
indexation cost works out to be approx 9.4lacs . the house is in mortgaged for a sum of rs 7.5lacs.
my query is whether this loan will be taken for capital gain rebate as i have to pay and release the document from the bank.
kindly clarify to my email if possible pl

Guest

I got possession of a flat from the builders in 2011. Where as my payment of instalments started from 2005 and over 95% was paid up by 2008. Can I claim indexation on each payment made from the date of payment till date of sale for calculation of capital gains on sale of property.- or is only from the date of possession till sale date.
Can i please get a clarification. Many thanks.

Guest

YOU CAN CLAIM ONLY DATE OF POSSESSION TO DATE OF SALES FOR PUPOSE OF INDAXTION COST AND NOT FOR DATE OF PAYING THE INSALMENT

Guest

when i am at 5 years old in 1975 my father had purchase one agrilnd. i have the rights on that asset after i became a major in 1988. In the year 2015 i sold that land. for calculating of capital gains which year’s CII i can take. kindly give suggestion.

Guest

1ST PLEASE CONFIRM THE LAND IS URBAN OR RURAL AGRICUL. LAND

Guest

Dear Sir/Mam

I have booked SECOND house in January 2014. Registration & Physical Possession of SECOND HOUSE have been completed in March 2016.I have sold a plot in March 2016. This Plot was purchased in September 2011. My question is Long term capital gain tax on sell of Plot would be exempted as i have registered second home in March 2016 itself. I mean Purchase of second property will be counted from date of booking (Date of Builder-Buyer Agreement) or date of Registration and Physical Possession?

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