Cost Inflation Index (CII) for FY 2018-19/ AY 2019-20 Notified by CBDT at 280 (Base Year 2001-02)

In the case of transfer of short term capital asset, the amount of capital gains can be arrived at by deducting the cost of acquisition/ improvement from the sale consideration. However, in the case of transfer of long term capital asset, capital gains are determined by deducting indexed cost of acquisition/ improvement from the sale consideration.

It may be noted that Budget 2017/ Finance Act 2017 has proposed amendments in provisions relating to indexation for the purpose of determining long term capital gains. Base year has been shifted from FY 1981-82 to FY 2001-02. In respect of assets acquired prior to 1 Apr. 2001, the assessee now has the option to use FMV/ Indexed Cost of Acquisition for arriving at the figure of long term capital gains. It’s likely that investors in property will stand to gain in most of the cases with shifting of the base year for the purpose of indexation.

Cost Inflation Index basically means the index notified by the Central Govt. with reference to average rise in the consumer price index, during the year immediately preceding the relevant previous year. However, indexed cost of acquisition is arrived at by multiplying the cost of acquisition with the change in cost inflation index since the year of acquisition or 1 April, 2001 whichever is later.

Cost Inflation Index (CII) for FY 2017-18/ AY 2018-19 Notified by CBDT at 272 (Base Year 2001-02)

CBDT has notified the Cost Inflation Index (CII) for Financial Year (FY) 2017-18/ Assessment Year (AY) 2018-19 at 272, with new Base Year 2001-02 (cost inflation index=100) in line with the amendments made in Budget 2017, as under:

S.O. 1790(E).- In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Cost Inflation Index as mentioned in column (3) of the Table for the Financial Years mentioned in the corresponding entry in column (2) of the said Table, namely:—

SI. No. Financial Year Cost Inflation Index
1 2001-02 100
2 2002-03 105
3 2003-04 109
4 2004-05 113
5 2005-06 117
6 2006-07 122
7 2007-08 129
8 2008-09 137
9 2009-10 148
10 2010-11 167
11 2011-12 184
12 2012-13 200
13 2013-14 220
14 2014-15 240
15 2015-16 254
16 2016-17 264
17 2017-18 272
18 2018-19 280

2. This notification shall come into force with effect from 1st day of April, 2018 and shall accordingly apply to the assessment year 2018-19 and subsequent years.

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38 Comments

  1. ANAND PATHAK says:

    flat purchased 521000 28/12/2006
    stamp 31000
    total 552000 purchse cost

    sale 10,00,000 06/11/2018
    how many rupees capital gain

  2. s p bhosale says:

    Dear Sir,
    I had purchased open plot for Rs.12500/- in 1989 have not constructed/made any additions to said house afterwards and want to sell the same in September 2018 for Rs.25.00Lakhs. What will be Long Term Capital Gains Tax liability and how much amount i may have to invest in REC Bonds to avoid the LTCG tax. Please elaborate the same.

  3. Yusuf sawar says:

    As per the valuation report of 2001-02 devaluation of my house is 3953000/- and I have sold the house in 2018-19 in the month of Dec 2018 what will be my capital gain an how much amount I have to invest

  4. Chirag says:

    Hello, I want to know how we can estimate the Indexation for the FY 2019-20. for calculation Capital Gain? Or when Govt. will declare the indexation for FY 2019-20?

  5. Pranab says:

    Purchased new flat in Nov’1996 for 2.89L. Improvement cost 25000 +registration 6500 + brokerage 10000. Sold in April 2019 for 30L less beokerage 60000. What will be my LTCG and my tax burden. How to save the tax. Request your help to understand.
    Rgds.

    1. OORNANABHA ACHARYULU RACHAGUNDLA says:

      i have purchased a flat in Mar 1999 for a total consideration of INR 6 L (approx). I sold it in Jul 2019 for INR 16 L
      Can you pl let me know the capital gains ???

  6. Rajesh says:

    I have purchased a industrial warehouse in March 2009 for 21 lacs, paid stampduty accordingly. Now the market value of that property is 45 lacs however the reckoner value is 73 lacs for the property since it comes under special zone.

    I need to know what will be the implication of selling at 45 lacs since it is almost 28 lacs less on my Incometax liability.

  7. x says:

    residential plot purchased feb1986 for 45000/- construction cost 2.00lakhs completed 1987 march.
    now market price 20 lakhs. plse notify capital gain tax under indexation

    1. Anil Kochhar says:

      PLEASE LET ME KNOW LONG TERM CAPITAL GAIN TAX FOR THE SALE PRICE OF PROPERTY, PRESENT VALUE OF WHICH IS RS. 40 LACS, PURCHASED IN 1985 FOR RS. 85000. TOTAL GAIN EXPECTED IS RS. 39.15 LACS. HOW TO INVEST

  8. Rajiv says:

    Cost of flat in 2012 Rs 43.54 Lacs .Cost of improvement in Han 2014 Rs 2.60 Lacs
    Flat sold in Dec 2018 for Rs 58 L but sale deed at Rs 64.94 Lacs (Circle rate) Rs 50000 paid as brokerage
    What will be capital gain after taking indexation cost of purchase price and improvement

  9. SWARNAKALA K R S says:

    Hello sir/madam , amount spend on Borewell, tank water, septic tank, EB metre will consider as cost of improvement while selling the property???

  10. SWARNAKALA K R S says:

    hello sir/madam,amount spend on Borewell, EB meter ,Tank Water,Septic tank will consider as cost of
    improvement while selling the property

  11. VIJAY Y GUPTE says:

    i have inherited 122 shares of a private company, purchased by parents 50 in 1979 and then 32 shares in 1990 and 40 shares in 1992, as right issue. The Company changed the name of the company in January 2012. (not listed in the market) The shares were transmitted in my favour in May2017.. This company amalgamated with other Private Limited company (not listed) in October/November 2017 with consideration of issue of 2 is to 1 OCRPS. Accordingly I received 61 OCRPS.Since I did not adopt option of conversion the OCRPS are redeemed at Rs. 10141/-. Unfortunately I do not have details of original purchase cost of 122 shares.Nor the market price on the date of transmission in my favour I therefore seek your advise of working LTG Tax.

  12. Ashok B khadpe says:

    1) I purchased house in May 1988 agreement value Rs 142800
    2) Registration fee paid Rs 1470
    3) while paying Stamp duty in March 1995, valuation as per ready reckoner 1990 was considered as 343000
    4) stamp duty paid Rs 6210 and deffrential registration Rs 2000 in March 19995

    5)Had taken loan for property and total interest paid Rs 158600

    Now selling price expected is Rs 85 lacs
    My Query
    1) What will be capital gain for Tax and percentage of Tax
    2) For buying new house ready possesion can it be done in financial year 2019-20 without paying tax on income of financial year 2018-19

    1. V B ACHAR says:

      I had purchased a village site for Rs. 4,000/- in the year 1984 and sold the same in September 2018 for
      Rs 4,00,000/-. pl inform me the indexed value and the capital gain tax to be paid. pl inform me about
      REC LTCG Tax bond

  13. Avnish says:

    I have bought an under construction flat in 2010 for Rs 2350000. Construction of which was completed in 2018 and it is now ready for possesstion. I am selling it for 28Lacs now without taking possession myself
    What will be the long term capital gain tax?
    My wife is the first name in builder buyer agreement though I have paid EMI for a loan taken on it.
    Who will be liable to pay the LTCG.

  14. DEEPAK PATIL says:

    In both the above examples, if the property is purchased/ constructed prior to base year , then firstly one is required to find out it’s Fair Market Value (FMV)as on 1-4-2001, from Govt. registered Valuator & then only apply the CII to arrive at the inflation adjusted current value.Please confirm by expert.

  15. Gunjan Singhai says:

    Hi,

    Is registration and stamp duty considered while computing cost of acquisition?

    Which means if the agreement value is 10 lakhs and stamp duty paid is 50000 and registration is 10000 then cost of acquisition is 1060000?

  16. shivaprasad says:

    Dear Sir,
    I had purchased a residential plot for Rs.25000/- in 1991 and constructed a house on it for Rs.246000/- in 1992-93 (as per Muncipal Assessment). I have not constructed/made any additions to said house afterwards and want to sell the same in September 2018 for Rs.25.00Lakhs. What will be Long Term Capital Gains Tax liability and how much amount i may have to invest in REC Bonds to avoid the LTCG tax. Please elaborate the same.

    1. Mamta says:

      Total Cost of House is (25,000+2,46,000)=271000/-
      Sale Value : 25,00,000/-
      Less : Indexed Cost 7,58,800/-
      Long term capital Gain =17,41,200/- to be invested in REC LTCG Tax Bond

  17. Bharat Udeshi says:

    In the article above, you have mentioned that In respect of assets acquired prior to 1 Apr. 2001, the assessee now has the option to use FMV/ Indexed Cost of Acquisition for arriving at the figure of long term capital gains.

    Please explain this with an example so that I can calculate LTCG myself. I have purchase property in FY.1994-95 and sold the same in FY.2018-19.

    Best regards.

  18. rugram says:

    I request the author to clarify the following statement in his article. Thanks.

    “Base year has been shifted from FY 2001-02 to FY 2001-02. “

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