Cost Inflation Index for Capital Gain Computation

Expla­na­tion (iii) to sec­tion 48 defines the term “indexed cost of acqui­si­tion” as the amount which bears to the cost of acqui­si­tion, the same pro­por­tion as the cost infla­tion index for the year in which the asset is trans­ferred bears to the cost infla­tion index for the first year in which the asset was held by the assessee or for the year begin­ning on April 1, 1981, whichev­er is later.

For com­put­ing long-term cap­i­tal gains cost infla­tion index is nec­es­sary. The cap­i­tal gains will be com­put­ed after deduct­ing the indexed cost of acqui­si­tion & Indexed Cost of Mod­i­fi­ca­tion from the full val­ue of con­sid­er­a­tion. The cost of pur­chase of the asset will be increased by apply­ing the cost infla­tion index (CII).

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

Finan­cial Year Cost Infla­tion Index Finan­cial Year Cost Infla­tion Index
1981 – 82 100 1997 – 98 331
1982 – 83 109 1998 – 99 351
1983 – 84 116 1999 – 00 389
1984 – 85 125 2000 – 01 406
1985 – 86 133 2001 – 02 426
1986 – 87 140 2002 – 03 447
1987 – 88 150 2003 – 04 463
1988 – 89 161 2004 – 05 480
1989 – 90 172 2005 – 06 497
1990 – 91 182 2006 – 07 519
1991 – 92 199 2007 – 08 551
1992 – 93 223 2008 – 09 582
1993 – 94 244 2009 – 10 632
1994 – 95 259 2010 – 11 711
1995 – 96 281 2011 – 12 785
1996 – 97 305 2012 — 13 852
 2013 — 14 939 2014 – 15 1024

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