Cost Inflation Index meaning and Index for all the years
Jun 1, 2009 Income Tax
What is Cost Inflation Index(CII)?
It is a measure of inflation that finds application in tax law, when computing long-term capital gains on sale of assets. Section 48 of the Income-Tax Act defines the index as what is notified by the Central Government every year, having regard to 75 per cent of average rise in the consumer price index (CPI) for urban non-manual employees for the immediately preceding previous year.
How does CII help in capital gains computation? Capital gain, as you know, arises when the net sale consideration of a capital asset is more than the cost. Since “cost of acquisition” is historical, the concept of indexed cost allows the taxpayer to factor in the impact of inflation on cost. Consequently, a lower amount of capital gains gets to be taxed than if historical cost had been considered in the computations.
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. And the long-term capital gains would be Rs 21.51, that is Rs 80 lakh minus Rs 58.49 lakh.
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Cost Inflation Index |
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Cost inflation index (CII)as notified by Central Government is as under: |
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Financial Year |
(CII) |
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1981-82 |
100 |
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1982-83 |
109 |
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1983-84 |
116 |
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1984-85 |
125 |
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1985-86 |
133 |
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1986-87 |
140 |
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1987-88 |
150 |
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1988-89 |
161 |
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1989-90 |
172 |
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1990-91 |
182 |
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1991-92 |
199 |
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1992-93 |
223 |
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1993-94 |
244 |
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1994-95 |
259 |
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1995-96 |
281 |
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1996-97 |
305 |
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1997-98 |
331 |
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1998-99 |
351 |
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1999-2000 |
389 |
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2000-2001 |
406 |
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2001-2002 |
426 |
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2002-2003 |
447 |
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2003-2004 |
463 |
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2004-2005 |
480 |
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2005-2006 |
497 |
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2006-2007 |
519 |
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2007-2008 |
551 |
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2008-2009 |
582 |
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2009-2010 |
632 |
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Tags: acquisition, assets, capital asset, CAPITAL GAIN, consumer price index, Cost Inflation Index, gain, income tax act, index cost, index cpi, indexation, Inflation, inflation index, long term capital, section 48, tax, taxpayers
October 29th, 2009 at 5:44 am
I wants know about sale of Residential Property.Case is as under.
Property purchased on 07/09/2009 @ 6,63,000/- + stamp Duty 27,210/- + Registration 10,060/- = Total Cost 7,00,270/-
Going to sale, in this month @ Rs.10,00,000/-.
Further I will purchase new flat against sale of old flat, agreement value will be above Rs.10,00,000/-.
Kindly let us know whether I am liable to pay any tax.
November 16th, 2009 at 5:15 am
since you have purchased/want to sale flat in the same F.Y 2009-10 .therefore it will be short term capital gain (10,00,000-7,00,270).but If you have invested profit for purchaeing new flat there will be no tax attarcted on profit.
Pradeep
November 23rd, 2009 at 4:04 am
I am an American citizen holding OCI (Overseas Citizen of India)card. I purchased a property for Rs. 63,00,000.00 in March 2005. If I sell this property in February 2010 for Rs. 1,35,00,000 and purchase a property for Rs. 6600,000.00. I have no other income in India. What will be my tax liability in 2010.YY
November 23rd, 2009 at 6:52 am
I wants know about sale of Residential Property.Case is as under.
Property purchased from bank in open sale offer which is motgaged towards bank on 21/12/2004 @ 1,24,401/-Basic amount is paid in installments in 18,660/- in 12/2004 other installments paid in 09/2005 i.e.1,05,741+ processing fee7869/-)property registered in 10/2009 (sale deed) stamp Duty 7,500/- + Registration 2,070/- = Total Cost 141840/- Mun. tax & Registration & Trnsfer on property card etc.Rs. 6000/- on 11/2009
Going to sale, in this month @ Rs.4,00,000/-.
Kindly let us know whether I am liable to pay any tax.
January 21st, 2010 at 5:54 pm
I am an American citizen holding OCI (Overseas Citizen of India)card. I purchased a property for Rs. 63,00,000.00 in March 2005. If I sell this property in February 2010 for Rs. 1,35,00,000 and purchase a property for Rs. 6600,000.00. I have no other income in India. What will be my tax liability in 2010.YY
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