Friends,
The Cost Inflation Index for the F.Y 2012-13 has been notified. Here are the rates of Cost Inflation from the Financial Year 1981-82. While computing long-term capital gains, ‘indexed cost of acquisition’ and ‘indexed cost of improvement’ are required to be deducted from the full value of consideration of the capital asset. Both these costs are thus required to be indexed with respect to the cost inflation index pertaining to the year of transfer.
How to Calculate Long Term Capital Gains (LTCG) ?
Long Term Capital Gains is computed as below :
LTCG = 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 CII of year of transfer /CII of year of acquisition Indexed cost of improvement =Cost of improvement x CII of year of transfer /CII of year of improvement
CII = Cost Inflation Index (Please see chart given below)
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%.
Cost Inflation Index from 1981-82 to 2012-13 (Notification of Cost Inflation Index F/Y 2011-12)
The Cost Inflation Index for the F.Y 2012-13 has been notified. Here are the rates of Cost Inflation from the Financial Year 1981-82. While computing long-term capital gains, ‘indexed cost of acquisition’ and ‘indexed cost of improvement’ are required to be deducted from the full value of consideration of the capital asset. Both these costs are thus required to be indexed with respect to the cost inflation index pertaining to the year of transfer.
How to Calculate Long Term Capital Gains (LTCG) ?
Long Term Capital Gains is computed as below :
LTCG = 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 CII of year of transfer /CII of year of acquisition Indexed cost of improvement =Cost of improvement x CII of year of transfer /CII of year of improvement
CII = Cost Inflation Index (Please see chart given below)
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%.
Cost Inflation Index from 1981-82 to 2012-13 (Notification of Cost Inflation Index F/Y 2011-12)
| FINANCIAL YEAR | COST INFLATION INDEX | FINANCIAL YEAR | COST INFLATION INDEX |
| 1981-82 | 100 | 1982-83 | 109 |
| 1983-84 | 116 | 1984-85 | 125 |
| 1985-86 | 133 | 1986-87 | 140 |
| 1987-88 | 150 | 1988-89 | 161 |
| 1989-90 | 172 | 1990-91 | 182 |
| 1991-92 | 199 | 1992-93 | 223 |
| 1993-94 | 244 | 1994-95 | 259 |
| 1995-96 | 281 | 1996-97 | 305 |
| 1997-98 | 331 | 1998-99 | 351 |
| 1999-2000 | 389 | 2000-01 | 406 |
| 2001-02 | 426 | 2002-03 | 447 |
| 2003-04 | 463 | 2004-05 | 480 |
| 2005-06 | 497 | 2006-07 | 519 |
| 2007-08 | 551 | 2008-09 | 582 |
| 2009-10 | 632 | 2010-11 | 711 |
| 2011-12 | 785 | 2012-13 | 852 |
Indexed cost of acquisition calculation (Notification of Cost Inflation Index F/Y 2011-12)
Indexed cost of acquisition: Cost of acquisition x cost inflation index for the year of transfer/cost of inflation index for the year acquisition or 1981-82, whichever is later
Indexed cost of improvement: cost of improvement x cost inflation index for the year of transfer / cost inflation index fore the year of improvement.
