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 has shown in the chart below.

Cost inflation Index 1981 to 2014-2015

  1. 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

  2. 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 “”

  3. 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

  4. 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.


  5. 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.

  6. 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?

  7. I would like to calculate capital gains.

    My share of Property area is around 350 sqft.

    Property inherited by me from my father on 22.9 2015

    My Father died on 21.9.2015

    Sale value as on 2015 is Rs. 12,000 per sq ft; Rs. 42,00,000

    My Father got the property settled in 2008 thru settlement deed from his sisters who in turn got inherited from their father in 1993

    Earlier the property was purchased by my father’s father i.e my grand father in the year 1939 thru sale deed. Cost not known.

    Now I need capital gains tax computation.

    Appreciate any help in this regard.

    Thanks in advance

  8. I bought a flat in 2007-08 for 22 lakhs and sold it for 40 Lakhs in 2014-15. Using the index for these years, brings my long term capital gain to negative (~80,000). What does that mean for my taxes?

      1. Calculation of capital gain=
        Sell Price-(purchase price X CII of year of sale)/CII of year of purchase
        Say. if you purchased in 1998 for Rs500000/- and selling for Rs7500000/- in 2016 The calculation will be :


  9. We have a ancestral property which was in my fathers name. As my father died we got the property transferred to my mother and brother and sisters names, by way of succession Deed.
    If I sell this property today which would fetch me 1.20 cr. what would be my capital gains and would the others also be affected for capital gains even if I would take all the proceeds in my name?
    Please advice.

    1. If it is ancestral property all the beneficiaries would be liable for capital gains tax according to their share. The CG tax will be distributed among the beneficiaries.

  10. I purchased agricultur land in august 2011 within the municipal area. In year September 2014 i sold this property. whether i have to pay capital gain in this property? can i save capital gain in investing in other agriculture land? I also purchased agriculture land in February 2014. Can i take advantage of capital gain investment in this property?

  11. I booked a flat in Dec’2006 & got possesion in Sept’2007. Which financial year shall i take as year of purchase ?
    Can i take parking money , club membership, club sinking fund & maintenance amount in the cost of aquisition.
    I provided wardrobes in the rooms & kitchen & spent some 96K on the same. I have no bill . Can this be added in the cost of acquisition. Similarly, i spent money on buying some loose furnitur as well as ACs for giving my flat on rent as fully furnished. Can this cost be also included in the cost of acquisition. I have some bills in this case. While selling, i am selling the flat with parking, with club house & with all the losse furniture as well as the fixed wardrobes all as a fixed one price

  12. Respected Sir,
    My case is an undivided family made of father/head fo family (P), wife(R), and only adult son (U) . He is US citizen and an Overseas Citizen of India (OCI) too.
    Total agri land holdings are 45 acres. An item of 205 acres are under contemplation of sale. Liklely price is Rs.4,00,00000/- (four crores. ) The land is within 2 ksm radius from the radius of limits of the nearby by municipal town having a population of 10960 people. The land is ancestral having passed on from generation to generation. P got the half of 21-5 acres by partition in the yeaar 1959 and rest common half from his paternal grandfather by registered settlement in the year 1976 or 77. That in the original partition fo the year 1959 both were common owners of the property. From 1976/77 onwards P has been the sole owner. P and R were married in 1974 and U was born in 1977. P has not been assessee at all whereas R is and U has been assessee in the USA. All three of has pancard and their HUF has its pancard too All three of us have individual Bank account . The HUF has opened its bank account too.
    1What will be the capital gain liability if sold at 4 crore?
    2, What would be unit of assessment? That is HUF or individual?
    3. Will there be any additional tax to the capital gain.
    4.can the son U sell his common half share in the property first by power of attorney in favor fo mother ro father ? And later say after a week father himself sells his common half to the same buyer and if so can the capital gain be apportioned between them ? so will be the capital gain liability too?
    5. What are the ways to minimise the capital gain . Say, can it be invested in any government securities and claim tax exemption?
    6.Can the capital gain be invested in acquisiiton house or land? r

  13. Sir
    I purchased a flat in Hyderabad in 2010 for total of Rs. 57 lakhs (1800 sft) in a multi-story building
    In 2011 the builder charged me for 2 car parking spaces + 2 years of maintenance fee + corpus fund + common gas pipeline for a total amt of Rs. 4 lakhs.
    Therefore, my total purchase amt in 2011 was Rs. 61 lakhs. However, the sale deed has the purchase price of Rs 21 lakhs.
    I have paid annual property tax of around Rs. 15000/- per year (totaling to Rs. 75,000/- till date)

    Now I plan to sell the flat for Rs. 90 lakhs. Taking into account this year’s CII as 1024,
    1) what would be my capital gain with the current CII (1024)?
    2) how can I reduce tax burden on my capital gain?
    Thank you

  14. sir please clarify:
    my self and my wife are equal/50% owners of flat at Chennai. my wife also owns another house at chennai bought in 1990 which she wants to dispose now.Please clarify whether she can buy another flat out of the sale proceedings to avoid long term tax liability, while she has 50% of ownership in another house as stated above.
    thanking you

  15. purchased flat in Ashoknaar in 2004/1005 for about Rs.26 lakhs,
    Trying to sell and may fetch a price of around 60 to 65 lakhs,
    What would be the capital gains pl?


  16. I purchased property in the year 2001. 7,00,000
    I plan to sell in 2015 30,00,000

    What will be the capital agains payable ? If I am not investing the proceeds in another property

    1. Type of caipatl gain – Long Term as property owned for more than 36 months

      Sale proceeds – Rs 3000000
      Cost of Property – Rs 700000
      Inflated Cost – Rs 700000*1086/426=1784507
      Capital gain – Rs 1215493
      Rate of Tax – 20%
      Tax Liability – Rs 243099+ 3% cess
      Total – Rs. 250392


  18. Really helpful for the purpose of calculating capital gain

    I was just calculating the long term capital gain on Sale proceed of Rs. 53.00 Lac which we received in f.y.2014-15 and property was actually purchased in f.y 2010-11 about 30.00 Lac

  19. Plot Purchase in 1991-92 Rs. 152001/-
    Addition in 1996-97 Rs. 50100/-
    Addition in 2012-13 Rs. 23351/-
    Total Cost Rs. 225452/-
    And Sold Rs. 3500000/- on 27.05.2015
    How much Tax Payable ?

    Pls also inform Capital gain Tax saving schemes.

    1. TAX SHOULD BE : 493422
      1.You can save Capital Gain by investing capital gain amount Rs: 2467111/-in New House(purchase/construction u/s 54

      2. New House construction must be completed with in three years from date of transfer of old House i.e Construction can started before sale of old house 26/05/2018

      3.New house can be purchased with one year before and two year after date of transfer of old house i.e START :28/5/2014 ENDED:26/5/2017

      4. You can not sale New house before three completion of Three years from date of purchase/construction(Depend upon purchase /construction date of new house)

      5. You May save capital gain Rs :2467111/- by Investing capital gain amount Rs2467111/-(maximum 50lakh in Financial year) in capital gain bonds of REC /NHAI with in Six Months from Date of sale u/s 54EC (START DATE:27/5/2015 END DATE:26/11/2015

  20. Purchase in 1991-92 Rs. 152001/-
    Addition in 1996-97 Rs. 50100/-
    Addition in 2012-13 Rs. 23351/-
    Total Cost Rs. 225452/-
    And Sold Rs. 3500000/- on 27.05.2015
    How much Tax Payable ?

    1. Purchased a flat in Chennai Ashoknagar in 2004/2005 for Rs, 26 lakhs. Trying to sell it now, wbich may fetch around 65 to 70 lakhs. What would be the capital gains

  21. I wish to know information on the following.
    I intend to sell my apartment at Bengaluru for a consideration of 40 lakhs. This apartment was built on 1/6 undivided share of Rs 90000/- (including stamp duty) in the year 1998 and finished construction @ Rs. 8.00 lakhs in the year 2000.(bills partly may be available). What would be my indexed appreciation?
    I also would like to pay portion of this sale consideration towards the loan availed from financial institution towards my new property registered on 13-6-2014. Whether I will be covered under one year PREVIOUS clause.
    Kindly help

    1. Yes you can pay the amount of this sale consideration if new property acquired is also residential….and you can have exemption under section 54 only that much amount that was earned by you in previous sale as a long term capital gain….if you sold the new property within 3 years your exemption would be withdrawn and would befully taxable and your total long term capital gain is RS1703837…as indexed cost of your apartments is 2296163

      1. Dear Mr Gupta
        Thank you for your reply.
        Kindly note I have already paid 900000/- towards part clearance of 35 lakhs loanof my new property DT 12.06.2014..I shall continue to pay the balance in EMI.
        Kindly help me whether I will be exempted, considering my new property is valued @ 48 lakhs including registration of which loan is 35 lakhs
        Kindly help

  22. Cost of the Land Rs. 1,12,000.00
    Stamp Duty Rs. 16,800.00
    Construction Cost Rs. 8,47,000.00
    Total Value of the Property Rs 9,75,800.00

    Date of Purchase of Property (Nanganallur) .. 03/03/1997
    Date of Sale of Property (Nanganallur) .. 03/06/2014
    CII of year of Purchase .. 305
    CII of year of Sale .. 1024
    So, CII factor is .. 3.357
    So index Cost of Acquisition Rs.9,75,800 x 3.357 .. Rs.32,75,760.00
    Sale of Property for .. Rs.57,00,000.00
    Capital Gain in this case .. Rs.24,24,240.00
    During the FY 2014-15 amount invested in
    1) Bangalore Apartment
    Cost of the Property .. Rs.17,56,250.00
    Construction Cost .. Rs.15,84,000.00
    Stamp Duty .. Rs. 1,17,525.00 .. Rs.34,57,775.00

    1. sir
      I own a apartment built on 1/6 undivided share (six owners) for Rs; 90000/-(regn cost included) in the year 1998, and construction cost at Rs 750000/- bills not available in the year 2000.

      I intend to sell this apartment in next 20 days.. before 10th June 2015. approx at Rs. 41.00 lakhs.Do I get the indexation benefit, considering that I don’t have bills for construction.

      I have bought one more apartment (presently residing) as on 13th June 2014. (date of registration) with the assistance of financial institution of Rs 36 lakhs. I intend to repay Rs: 1000000/- to this loan once my sale transaction of the first apartment gets completed, hopefully before 13th June 2015.Do I get exemption under ”one year prior”clause.

      kindly help

      vincent w miranda

  23. If the Indexed cost is matching to Selling price, do we have to do something like filing zero return etc.?
    If we do not have receipts for the construction of house done 33 years ago or modifications done thereafter, can we consider & show them for calculation of Capital gain?

  24. Sir, My father purchase house in the name of my Mother in 1982 @ Rs. 90,000/-. Now my Mother and Father both died and i transfer property in my name in 2012. Now i decide to sell out property which market value is Rs. 22 lacs. Please guide me weather Capital Gain is applicable to me. If applicable the how much i have to pay CGT on sale of property.
    Awaiting your reply.
    Amit Mistry

  25. I have purchased a house in 1962 for Rs. 18000/- and constructed first floor by Rs. 1,50,000/-in 1970 i intend to sale the said property in March 2015. Please guide me how much tax i have to pay if i will sale the said property in Rs.50/- lacs. Pl send your reply on my email.

    thanking you

  26. My querry: Residential property in Aurangabad (Maharashtra) purchased in 1970 for Rs.39,000/-. Addition of two rooms in the property in 1995 at the cost of Rs.1,25,000/-. Hope to sell the entire property in Feb/Mar 2015 at Rs.67,00,000/-. How much capital gains tax would be and what would be the tax I would have to pay and to nullify the total tax payable, how much capital infra structure bonds need to be purchased.I am 70 yrs old, Immediate advice would be highly appreciated. MRJoshi..

    1. TAX AMOUNT:1169025
      1 You can save Capital Gain by investing capital gain amount Rs :5845124/-in New House(purchase/construction u/s 54

      2. New House construction must be completed with in three years from date of transfer of old House i.e Construction can started before sale of old house (1/2/2018)

      3. New house can be purchased with one year before and two year after date of transfer of old house i.e start date:1/4/2014 end date:1/2/2017
      4. You can not sale New house before three completion of Three years from date of purchase/construction

      5.You May save capital gain Rs :5845124/- by Investing capital gain amount Rs5845124/-(maximum 50lakh in Financial year) in capital gain bonds of REC /NHAI with in Six Months from Date of sale u/s 54EC ( start date: 1/3/2015 end date : 7/2/2015

  27. Sir, my father booked a commercial office in 1985. And paid about Rs.80K before his death which was in 1994. But the building was not completed for more than 20 years and recently it got completed.
    Now we want to sell this property and we are four siblings to our father.
    There is no will and we want to sell and give a major portion to our sister.
    What will be the capital gains tax to each of us.

    thanking you in anticipation of a quick reply.

  28. Purchased a land on 23rd November 2012 sold it in January 2015. Purchase and sale price 2016000 and 3500000 respectively. What’s the tax amount? Pls help

  29. Hi – Facts as follows:

    Purchased Site in March 1992 = Rs. 80,300
    Sold House on 13 November 2014 = Rs.56,25,000
    Index in year of purchase = 223
    Index in year of sale = 1025

    Indexed Cost of Property = Actual Purchase Price * (Index in year of sale / Index in year of purchase)
    Indexed Cost of Property = 80,300 * (1025 / 223) —- Rs. 369091.9282511211
    Sale Amount = Rs.56,25,000
    Capital Gain = 56,25,000 – 369091.9282511211 = Rs. 5255908.071748879

    Out of Rs. 52,55,908, i have reinvested Rs. 4275000 (incl. registration) in another property on 29th November 2014 and have kept the remaining Rs.10,00,000 odd in Capital Gain.

    Kindly confirm if I’m well within the fence of rules. Thanks in advance.


  30. I am planning to sell my house which i acquired in 2007 April (booked in August 2005 and occupied in April 2007) at INR 25 lacs.
    It will possibly sell now for INR 1.32 crores. What would be the capital gains on this transaction if i do go ahead? For the amount that is not counted as capital gains , may i imvest it anyhwere (bank , stocks , FD etc)?. regards Vikram

  31. m/s ”p” brothers Ludhiana running an industrial unit were order by municipal cooperation Ludhiana to shift there consider from urban areas of Ludhiana they shifted they consider during the previous year 2014-2015. in this year the company sold some of assets.

  32. 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?

    1. 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.

  33. 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

  34. 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.

  35. 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.

    1. 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]

  36. 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

    1. 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.

  37. 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]

  38. 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.

  39. 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

    1. 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 .

  40. 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?

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

      1. 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.

        1. 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

  41. 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.

  42. 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?

  43. 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

    1. 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.

  44. 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

  45. 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.

  46. 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?

  47. 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.

    1. 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..

  48. 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.

  49. 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.


  50. 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

  51. 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?



  52. 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

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

  54. 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

    1. 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.


  55. 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

    1. 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.

  56. 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?

    1. 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

  57. 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

  58. 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.

    1. 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.

  59. 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.

    1. 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/-

      1. 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?

    2. 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.

  60. 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??

  61. 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)?

  62. 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.

  63. 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?

    1. 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).

    2. 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

  64. 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?


  65. 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.

    1. 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.

    2. 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.

  66. 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.

  67. 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


    1. 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.


  68. 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 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?

  69. 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.


    1. 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.

  70. 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.

  71. 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

  72. 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.

    1. 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.

  73. 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.

  74. 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?

  75. 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

  76. 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.

  77. 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?


  78. 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

  79. 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?

    1. 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.

        1. 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).

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

  81. 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?

    1. 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.

      1. [The comment is Updated]
        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

        1. 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.


  82. 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?

  83. 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

  84. 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

    1. 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.

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

    1. 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).

      1. 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

        1. 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).

    1. 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.

    2. 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

    1. 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.

  86. 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.

        1. 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.

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

          2. 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).

  87. 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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