How do you calculate indexation?
Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost. For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold in A.Y. 2009 -10 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh.
How is long term capital gain indexation calculated?
Long-term capital gain = full value of consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where: Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.
What is the index n0for the AY 21 22?
The cost of inflation index (CII) for the financial year 2021-22 has been notified by the Ministry of Finance. The ministry has set the Cost Inflation Index FY 202-22 as 317. For the previous FY 2020-21, CII value was 301.
What is the base year for indexation?
The base year is the first year of the cost inflation index and has index value as 100. Index of all other years is compared to the base year to see the increase in inflation percentage.
What is the indexation rate for 2020 21?
301
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.
How is indexation benefit calculated?
The Cost Inflation Index is announced by the Central Board of Direct Taxes (CBDT) and is applied to the capital gains in debt funds. The formula used is: Actual purchase value after indexation = original amount * (CII of the current year/CII of the purchasing year.)
How do you calculate capital gains on sale of property in 2021?
Long-term capital gain = Final Sale Price – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where: Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.
What is the indexation rate for FY 2021-22?
317
In terms of powers conferred under Section 48 of the Income Tax Act, The Central Board of Direct Taxes (CBDT) has notified the cost inflation index (CII) for FY 2021-22 as 317 via a notification dated June 15, 2021.
How do you calculate the cost of indexation for FY 2020-21?
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….
| Financial Year | CII Number |
|---|---|
| 2020-21 | 301 |
| 2019-20 | 289 |
| 2018-19 | 280 |
| 2017-18 | 272 |
What is the indexation rate for 2020-21?
How do you calculate the cost inflation index for FY 2020-21?
The taxes on these gains will be paid by you while filing your income tax returns (ITR) for FY 2020-21 (AY 2021-22). The formula to calculate inflation-adjusted cost price is: (CII of the year of sale/CII for the year of purchase) * Actual cost price.
What is indexation table?
The cost inflation index chart is notified every year by the government and is defined under Section 48 of the Income Tax Act India, 1961. The index is then used to calculate the long term capital gains that arise from the transfer or sale of capital assets.