Category: Cost of Inflation Index

COST OF INFLATION INDEX FOR CAPITAL GAIN CALCULATION YEAR 2014-15 : CII 1024

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Central Government has issued the Notification for Cost of Inflation Index for capital gain calculation for financial year 2014-15 is 1024.

Notification No. 31/2014/F.No.142/3/2014-TPL: S.O. 1498(E)- In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (42 of 1961), the Central Government hereby  makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:-

2. In the said notification, in the Table, after serial number 33 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

S.No Financial Year Cost Inflation Index
34 2014-15 1024

Cost of Inflation Index for FY 2013-2014 .i.e AY 2014-15

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Cost of Inflation Index for FY 2013-2014 .i.e AY 2014-15 for calculating capital gain is 939. Each Central Board of Direct taxes announces cost of Inflation index for the purpose of calculating inflation adjusted cost of asset for calculating capital gain tax on sale of capital assets.For Financial Year 2013-14 COI Index was declared through income tax Notification No.40/2013/F.No.142/7/2013-TPL.  Cost of Inflation Index Chart from Year 1981-82 to 2013-14

GOVERNMENT OF INDIA

MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
NOTIFICATION
INCOME-TAX
New Delhi, the 6th day of June, 2013

Notification No.40/2013/F.No.142/7/2013-TPL

S.O. 1464(E) – In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:-
2. In the said notification, in the Table, after serial number 32 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

Sl. No.  Financial Year Cost Inflation Index
(1) (2) (3)
“33  2013-14  939”

Cost Inflation Index for Financial Year 2012-13

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Cost Inflation Index for Financial Year 2012-2013 is 852 and for Year 2011-2012 is 785.

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, number S.O. 709 (E), dated the 20th August, 1998, namely:- Check Cost of Inflation Index Chart from 1981 to 2013 and how to calculate index cost of asset

In the said notification, in the Table, after serial number 31 and the entries relating thereto, the following serial number and entries shall be inserted, namely :-How to Calculate Indexed Cost of Acquisition & Improvement

Sl. No.

Financial Year

Cost Inflation Index

(1)

(2)

(3)

“32

2012-13

852″

Cost Inflation Index for Financial Year 2011-12 as Per Notification Issued on 23-6-2011

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In exercise of the powers conferred by clause ( v ) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O. 709(E), dated the 20th August, 1998, namely :—

In the said notification in the Table, after serial number 30 and the entries relating thereto, the following serial number and entries shall be inserted, namely :—

  

“31

2011-12

785″

 

                                                             
                                                                        
                                                                                                                                                                            
         
                        
  

Cost of Inflation Index Chart from Year 1981-82 to 2013-14

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Check Cost of Inflation Index Chart from Year 1981-82 to Year 2013-14. Each Year Central Board of Direct Taxes (CBDT) issues the Inflation index for the year based on the inflation in the India for income tax purpose, this Cost of Inflation is used in calculating the index value of capital assets, so that index value can be used as Current Cost of Capital asset and net Long Term Capital Gain can be calculated. Cost of Inflation Index for Year 2012-2013 is 852 and  Cost of Inflation Index for Year 2013-2014 is 939. Also read Rate of Income Tax on Sale of  Capital Assets

Fin. Year Index

Fin. Year Index
1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

100

109

116

125

133

140

150

161

172

182

199

223

244

259

281

305

331

 1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

351

389

406

426

447

463

480

497

519

551

582

632

711

785

852

939

Example: How to Calculate Index Cost of Asset

If a assess purchased a house for Rs 200000 on 25th December 1988 and sellout for Rs.1000000 on 20 the December 2012 the computation will be as follows :

Sale consideration: 1000000
Less Cost of Acquisition^ 945783
Capital gain: 54217

*200000/166*785 =945783

Latest Update: Cost of Inflation Index for Year 2012-2013 is 852

How to Calculate Indexed Cost of Acquisition & Improvement

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This provision deals with section 48, defines as the amt which bears cost of acquisition, the same ratio as cost inflation index for the year in which asset is transferred bears cost inflation index for first year in which asset was held or beginning on April, 1981 whichever is higher.

 

Situation: 1

Capital asset acquired by assess in before april1, 1981 referred in sec 49(1)

Fair market value april1, 1981or cost of acquisition Of asset whichever is more

 

 

× cost inflation index for year in which it occur

cost inflation index for 1981-82

  

 

Cost of improvement (ignore prior to April 1, 1981)

 

 

× cost inflation index for year in which it occur

cost inflation index in the year in which improvement took place

  

 

Situation: 2

Capital asset acquired by assess after april1, 1981 referred in sec 49(1)

Cost of acquisition

 

 

× cost inflation index for the first year in which it occur

cost inflation index for year in which asset is acquired

  

 

Cost of improvement incurred by Assess

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index for year in which improvement took place

  

 

Situation: 3

Capital asset is acquired by assess before April 1, 1981 and the same is originally acquired by previous owner prior to April 1, 1981

Fair market value april1, 1981or cost of acquisition Of previous owner whichever is more

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index for 1981-82

  

 

Cost of improvement incurred by assee & previous owner

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index in year in which it took place

  

 

Situation: 4

Capital asset is acquired by assess after April 1, 1981 but it was acquired by previous owner before April 1, 1981.

Fair market value april1, 1981or cost of acquisition Of previous owner whichever is more

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index in year in which it took place

  

 

Cost of improvement incurred by assee & previous owner

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index in year in which it took place

  

 

Situation: 5    

This situation covers where capital asset is acquired by assee after April 1, 1981 & it was it was acquired by previous owner April 1, 1981

 

Cost of acquisition to the previous owner

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index for year in which asset was held by assess

  

 

Cost of improvement incurred by assee & previous owner

 

 

× cost inflation index for the year in which asset is transferred

cost inflation index in year in which improvement took place