What is cost inflation index in India?
Table of Contents
Cost inflation index calculates the estimated rise in the cost of goods and assets year-by-year as a result of inflation. It is fixed by the central government in its official gazette to measure inflation. Section 48 of the Indian Income Tax Act, 1961, defines the index as notified by the government every year.
How do you use indexation method?
How to apply indexation
- Step 1: Identify your eligible capital costs.
- Step 2: For each eligible cost, identify the CPI rate for the quarter in which the cost was incurred.
- Step 3: Calculate the indexation factor for the cost.
- Step 4: Multiply the cost by the indexation factor.
What is the cost inflation index for 2019-20?
289
NOTIFIED COST INFLATION INDEX UNDER SECTION 48, EXPLANATION (V)
Sl. No. | Financial Year | Cost Inflation Index |
---|---|---|
17 | 2017-18 | 272 |
18 | 2018-19 | 280 |
19 | 2019-20 | 289 |
20 | 2020-21 | 301 |
What is the cost inflation index for 2021 22?
317
The Central Board of Direct Taxes (CBDT) notified the cost inflation index (CII) for FY 2021-22 as 317 via a notification dated June 15, 2021. For the previous year, i.e., FY 2020-21, CII was notified as 301. CII is used to calculate the inflation adjusted cost price of an asset.
What is FY 2019/20 cost inflation?
Cost Inflation Index Chart/ Table with base Year 2001-02 (Applicable for FY 2001-02 to FY 2021-22)
SI. No. | Financial Year (FY) | Cost Inflation Index (CII) |
---|---|---|
17 | 2017-18 | 272 |
18 | 2018-19 | 280 |
19 | 2019-20 | 289 |
20 | 2020-21 | 301 |
What is the CII for the year 1981?
100
Actual Cost Of Purchase x Cost inflation Index On year of Sale/Cost Inflation Index On Year Of Purchase. So, capital gains would be Rs 20 lakhs x 1081/133….Cost Inflation Index Table From 1981-82 To 2015-16 For Capital Gains Tax.
FINANCIAL YEAR | COST INFLATION INDEX TABLE |
---|---|
1982-1983 | 109 |
1981-1982 | 100 |
Does CGT allow for inflation?
At present investors can be charged CGT even though they have made no real gain (i.e. after inflation). The indexation allowance for individuals was scrapped under Gordon Brown in 2008. One reason the headline rates of CGT are lower than the income tax rates is to compensate for the abolition of indexation relief.
What is the cost inflation index for 2021-22?
What is the cost inflation index (CII) for 2015-16?
CBDT has notified the Cost Inflation Index (CII) for Financial Year 2015-16. Cost Inflation is required to calculate Long term capital gain under Income Tax Act Tax liability on LTCG to be taken at 20%. If total income other than LTCG is less than zero slab,LTCG over the zero slab only attracts tax at 20%.
What is the inflation rate for January 2016?
Divide this number by the January 2016 CPI and then multiply by 100 and add a % sign. The result is January’s annual inflation rate of 2.5%.
How to calculate the cost inflation index after indexing?
If you have made improvement of the asset, then you need to adjust the cost inflation index with the multiplying with the CII of the year the improvement was made. Cost after Indexing = Cost before indexing * CII for sale year/CII for purchasing year
What is the average inflation rate from 2016 to 2021?
Inflation from 2016 to 2021 Cumulative price change 12.16% Average inflation rate 2.32% Converted amount ($1 base) $1.12 Price difference ($1 base) $0.12 CPI in 2016 240.007