Calculation of indexed cost of acquisition
Cost Inflation Index is used to calculate the estimated increase in prices of goods Indexed cost of acquisition = Cost of Acquisition X {CII (for the year it is being i) by allowing the cost of acquisition of the said flat amounting to Rs.45,51, 720/- to The details of indexation as described in computation of capital gain by the Step3: Now, note down the base year's Consumer Inflation Index. Step4: Multiply the Original Cost of acquisition with CII noted in step 2 and divide the same by CII While calculating Long Term Capital Gains for certain capital assets, one is allowed to deduct Indexed Cost of Acquisition/Indexed Cost of Improvements from Add: Expenses relating to acquisition (e.g. brokerage, registration charges, legal expenses etc.) A5, Total Cost of Acquisition of the Immovable Property. A6 For this, you shall need to calculate the indexed cost of acquisition, which is computed as follows: Cost of acquisition x Cost inflation index of the year in which
CII or cost inflation index helps you to calculate inflation value on capital gains of selling any asset, the purchase price is called the indexed cost of acquisition.
22 Aug 2018 Calculation of indexation benefit for assets that are gifted and sold later has long been a contentious issue between the income-tax department 2 Apr 2019 Step by Step method to calculate the long term capital gain or loss. Indexation benefit is Net ConsiderationLess: Indexed Cost of acquisition 3 Feb 2017 old rule: If the asset was acquired after 01-04-1981, the purchase price has to be indexed with cost inflation index computed with a base as 100 3 Apr 2019 In respect of assets acquired prior to 1 Apr 2001, the assess now has the option to use FMV/ Indexed Cost of Acquisition for arriving at the figure
Disclaimer:The above calculator is only to enable public to have a quick and an easy access to basic tax calculation and does not purport to give correct tax
The cost inflation index is 582/389 = 1.49. While computing tax, CII is multiplied with the purchase price to arrive at the indexed cost of acquisition. This is the actual cost of the asset. Therefore, the indexed cost of acquisition = 20,00,000 X 1.49 = Rs.29,92,288 Cost Inflation Index number is referred to while calculating the Indexed cost of acquisition of a capital asset. Financial Calculator The cost inflation index (CII) is a means to measure inflation, which is used in the computation of long-term capital gains with regard to the sale of assets. How to Calculate Indexed Cost of Acquisition & Improvement Posted on August 1, 2013 August 8, 2013 by Finhealth 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 The cost of acquisition refers to the total cost incurred when a business takes on a new client, asset, or good. The cost of acquisition is put onto the company's books after any discounts or Cost of acquisition is Rs 2 lakh. CII number for purchase year (2014-15) was 240. CII during sale year (2019-20) is 289. This would mean that your indexed cost price of acquisition would be – (2,00,000 * 289/240) = Rs 2,40,833.
CII or cost inflation index helps you to calculate inflation value on capital gains of selling any asset, the purchase price is called the indexed cost of acquisition.
Cost of acquisition is Rs 2 lakh. CII number for purchase year (2014-15) was 240. CII during sale year (2019-20) is 289. This would mean that your indexed cost price of acquisition would be – (2,00,000 * 289/240) = Rs 2,40,833. Now the indexed cost of acquisition will be as per the above formula i.e. Indexed Cost of Acquisition=(Rs.50 lakh/117)*272=Rs.1,16,23,931. So the Long Term Capital Gain=Selling Price-Indexed Cost of buying property=Rs.33,76,069. (Note-As per the below Cost of Inflation Index (CII), the CII rate for FY 2017-18 is 272 and for FY 2005-06, it is 117). If the long term capital gains liability has to be computed under Section 48 of the Act by treating that the assessee held the capital asset from 2 9/1/1993, then, naturally in determining the indexed cost of acquisition under Section 48 of the Act, the assessee must be treated to have held the asset from 29/1/1993 and accordingly the cost inflation index for 1992-9 3 would be applicable in determining the indexed cost of acquisition. Cost of Acquisition – Cost of acquisition of an asset is the sum total of amount spent for acquiring the asset. Where the asset was purchased, the cost of acquisition is the price paid. Any expenditure incurred in connection with such purchase, exchange or other transaction eg. brokerage paid, registration charges and legal expenses etc - Cost will include cost of acquisition as per the sale deed, stamp duty charges, registration charges, GST, brokerage and interest paid on loan to clear the mortgage before sale. Additions and modifications will not be added as they take place after the purchase of the property. This price is referred to as the Indexed Cost of Acquisition. How to calculate Long term capital gains on sale of property The cost of acquisition of property that was purchased many years ago can be indexed, using the cost inflation index numbers. The Indexing shall be done to the Cost of Acquisition and Cost of Improvement by the applying the Cost Inflation Index Factor as explained below. Computation of Indexed Cost of Acquisition. The following are the 2 ways through which an asset can be acquired by an assessee:-Assets acquired directly by the taxpayer himself.
What is the indexed cost of acquisition? Here, the asset is purchased before the base year. Hence the cost of acquisition = Higher of actual cost or FMV on 1 st April 2001. i.e. Cost of Acquisition = Rs. 3,20,000. CII for the year 2001-02 and 2016-17 is 100 and 264 respectively. Indexed cost of acquisition = 3,20,000 x 264/100 = Rs. 8,44,800.
Cost Inflation Index number is referred to while calculating the Indexed cost of acquisition of a capital asset. Financial Calculator The cost inflation index (CII) is a means to measure inflation, which is used in the computation of long-term capital gains with regard to the sale of assets. How to Calculate Indexed Cost of Acquisition & Improvement Posted on August 1, 2013 August 8, 2013 by Finhealth 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 The cost of acquisition refers to the total cost incurred when a business takes on a new client, asset, or good. The cost of acquisition is put onto the company's books after any discounts or Cost of acquisition is Rs 2 lakh. CII number for purchase year (2014-15) was 240. CII during sale year (2019-20) is 289. This would mean that your indexed cost price of acquisition would be – (2,00,000 * 289/240) = Rs 2,40,833. Now the indexed cost of acquisition will be as per the above formula i.e. Indexed Cost of Acquisition=(Rs.50 lakh/117)*272=Rs.1,16,23,931. So the Long Term Capital Gain=Selling Price-Indexed Cost of buying property=Rs.33,76,069. (Note-As per the below Cost of Inflation Index (CII), the CII rate for FY 2017-18 is 272 and for FY 2005-06, it is 117). If the long term capital gains liability has to be computed under Section 48 of the Act by treating that the assessee held the capital asset from 2 9/1/1993, then, naturally in determining the indexed cost of acquisition under Section 48 of the Act, the assessee must be treated to have held the asset from 29/1/1993 and accordingly the cost inflation index for 1992-9 3 would be applicable in determining the indexed cost of acquisition.
Step3: Now, note down the base year's Consumer Inflation Index. Step4: Multiply the Original Cost of acquisition with CII noted in step 2 and divide the same by CII While calculating Long Term Capital Gains for certain capital assets, one is allowed to deduct Indexed Cost of Acquisition/Indexed Cost of Improvements from Add: Expenses relating to acquisition (e.g. brokerage, registration charges, legal expenses etc.) A5, Total Cost of Acquisition of the Immovable Property. A6