## Indexation factor for capital gains

As per CPI – Cost Inflation Indexation have got the calculation for Capital Gains on Sale of Property as Rs.5,83,826/-. Sir, I want to know what will be Rate of Tax for Capital Gains. The Sellers – 2 in nos who are beneficiaries of the Sale Proceeds of the Property are aged less than 60 years AND do not have Annual Income above Rs.1 lac. Cost Inflation Index (CII) is an Index which finds its utility in the income tax act at the time of computation of Long Term Capital Gains to be disclosed in the Income Tax Return. The Cost Inflation Index is issued by the Central Board of Direct Taxes (CBDT) and the figures that have been issued by the CBDT till date have been disclosed herewith for your Ready Reference. Actually the calculation above is not correct. While deducting the purchase price of 35 Lakh, from the sale price of 105 Lakh, gives you a profit of 70 Lakh, this is not your capital gain. This is because when you factor in the cost inflation indexation, your taxable capital gain liability is reduced considerably.

Cost Inflation Index (CII) is an Index which finds its utility in the income tax act at the time and Cost of Improvement by the applying the Cost Inflation Index Factor as explained below. Capital Gains = Sale Price – Indexed Cost of Acquisition. 5 Feb 2020 Indexation is the procedure of regulating prices grounded on a typical index factor in the inflation rate while computing profits received on sale of  15 Sep 2019 CII is the number used to arrive at the inflation-adjusted cost of acquisition of assets and investments while calculating long-term capital gains  11 Jul 2019 Capital Gains Tax on Sale of Inherited Property. Depending on the Index Factor of the Purchased Price: 280/100 = 2.8. Here, 280 is the CII of  Cost Inflation Index(CII) 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  28 Jun 2019 The indexation factor is worked out using the consumer price index (CPI). If the CGT event happened on or after 11.45am (by legal time in the

## Actually the calculation above is not correct. While deducting the purchase price of 35 Lakh, from the sale price of 105 Lakh, gives you a profit of 70 Lakh, this is not your capital gain. This is because when you factor in the cost inflation indexation, your taxable capital gain liability is reduced considerably.

Capital acquisitions tax Capital allowances Capital gains tax Car capital allowance limits Civil service subsistence rates Civil service motor travel rates Corporation tax Corporation tax time limits Discretionary trust tax Exchange rates Exemption limits Household charge [ceased] Income levy [ceased] Income tax rates Income tax reliefs Income tax credits Indexation factors Interest on unpaid tax Local property tax (LPT) Non-principal private residence (NPPR) charge [ceased] Pensions Revised CII numbers: You will need these to calculate capital gains for FY17-18 and onward Cost inflation index numbers are used for calculating inflation-indexed purchase price while calculating capital gains on any asset held for the long term. You multiply the cost by the indexation factor for the year you incurred the cost. (The indexation factor is also known as the multiplier.) (The indexation factor is also known as the multiplier.) You can deduct this indexed cost as an allowable expense from your capital gain. Indexation is not available on expenditure incurred within 12 months prior to the date of disposal. Indexation relief will only apply for the period of ownership of the asset up to 31 December 2002 for any disposals made on or after 1 January 2003. CAPITAL GAINS TAX Multipliers Indexation Allowance allows for the effects of inflation when calculating the chargeable gains of companies or organisations. HM Revenue and Customs ( HMRC ) Indexation Allowances for 2014 to 2016

### 20 Mar 2019 Structure of Capital Gains in Case of a Property Sale *Indexed, or Indexation is an adjustment made to factor in the effects of inflation.

Cost Inflation Index (CII) is an Index which finds its utility in the income tax act at the time of computation of Long Term Capital Gains to be disclosed in the Income Tax Return.The Cost Inflation Index is issued by the Central Board of Direct Taxes (CBDT) and the figures that have been issued by the CBDT till date have been disclosed herewith for your Ready Reference. Capital Gains Tax with Indexation and Without Indexation . There are some asset classes where you have the choice of using Indexation or not . This is true for debt funds and FMP’s. So the current rate is either 20% with Indexation or 10% without Indexation for Long term Capital Gains . Long term capital gain on any asset is calculated by subtracting the sale price from the inflation-indexed cost price. (Rs 10,000 * (240 / 105)) = Rs 22,857 (Approx.) The revised index will be applicable for calculating indexed capital gains for any asset sold in the financial year 2017-18 and onwards. Prices increase due to inflation, therefore to avoid a company paying tax due to the increases in inflation, an indexation allowance is calculated based on retail price indexes to remove the effects of inflationary increases in the capital gain. So the current rate is either 20% with Indexation or 10% without Indexation for Long term Capital Gains . For Tax without Indexation, you simply find out normal profit (sale price – cost price) and then calculate the tax. So you can calculate tax using both ways and then choose the one which is lower 🙂 . To arrive at a capital gain, it is very much important to calculate the LTCG. For this purpose Cost of Inflation Index is a must. Take an example of how the indexed cost of acquisition will be calculated using Cost of Inflation Index or CII.

### 15 Sep 2019 CII is the number used to arrive at the inflation-adjusted cost of acquisition of assets and investments while calculating long-term capital gains

5 Feb 2019 Mutual Funds Taxation factors Capital gains LTCG STCG The LTCG tax rate on non-equity funds is 20% (with Indexation benefit). Capital  13 Aug 2018 The tax rate on capital gains depend on a number of factors, Indexation proposals were floated during the tax reforms of 1978 and 1986, but

## Actually the calculation above is not correct. While deducting the purchase price of 35 Lakh, from the sale price of 105 Lakh, gives you a profit of 70 Lakh, this is not your capital gain. This is because when you factor in the cost inflation indexation, your taxable capital gain liability is reduced considerably.

As per CPI – Cost Inflation Indexation have got the calculation for Capital Gains on Sale of Property as Rs.5,83,826/-. Sir, I want to know what will be Rate of Tax for Capital Gains. The Sellers – 2 in nos who are beneficiaries of the Sale Proceeds of the Property are aged less than 60 years AND do not have Annual Income above Rs.1 lac. Cost Inflation Index (CII) is an Index which finds its utility in the income tax act at the time of computation of Long Term Capital Gains to be disclosed in the Income Tax Return. The Cost Inflation Index is issued by the Central Board of Direct Taxes (CBDT) and the figures that have been issued by the CBDT till date have been disclosed herewith for your Ready Reference.

Capital Gains Tax with Indexation and Without Indexation . There are some asset classes where you have the choice of using Indexation or not . This is true for debt funds and FMP’s. So the current rate is either 20% with Indexation or 10% without Indexation for Long term Capital Gains . Long term capital gain on any asset is calculated by subtracting the sale price from the inflation-indexed cost price. (Rs 10,000 * (240 / 105)) = Rs 22,857 (Approx.) The revised index will be applicable for calculating indexed capital gains for any asset sold in the financial year 2017-18 and onwards. Prices increase due to inflation, therefore to avoid a company paying tax due to the increases in inflation, an indexation allowance is calculated based on retail price indexes to remove the effects of inflationary increases in the capital gain. So the current rate is either 20% with Indexation or 10% without Indexation for Long term Capital Gains . For Tax without Indexation, you simply find out normal profit (sale price – cost price) and then calculate the tax. So you can calculate tax using both ways and then choose the one which is lower 🙂 . To arrive at a capital gain, it is very much important to calculate the LTCG. For this purpose Cost of Inflation Index is a must. Take an example of how the indexed cost of acquisition will be calculated using Cost of Inflation Index or CII. It is important to compute the long-term capital gains/long-term capital losses (LTCL) on the assets which have been or are planned to be sold in FY 2019-20. The tax payable on such indexed LTCG is 20 per cent plus cess at 4 per cent. There are two things that individuals need to keep in mind regarding the cost inflation index.