CBDT notifies Cost Inflation index for Financial Year 2018-19 at 280, vide Notification No. 26/2018-Income Tax dated 13th June, 2018.
Clause (v) of Explanation to section 48 defines “Cost Inflation Index “, in relation to a previous year, to mean such Index as the Central Government may, by notification in the Official Gazette, specify in this behalf, having regard to 75% of average rise in the Consumer Price Index (Urban) for the immediately preceding previous year to such previous year.
The Finance Act, 2017 has amended section 55 to provide that the cost of acquisition of an asset acquired before 01.04.2001 shall be allowed to be taken as fair market value as on 1.4.2001 and the cost of improvement shall include only those capital expenses which are incurred on or after 01.04.2001. Thus, the base year has been shifted from F.Y.1981-82 to F.Y.2001-02. Consequential amendment, considering the base year as F.Y.2001-02, has also been made in clause (iii) of Explanation to section 48 defining “indexed cost of acquisition”.
Accordingly, vide this notification, Cost inflation index for Financial Year 2018-19 has been notified as 280.
MINISTRY OF FINANCE
(Department of Revenue)
(Central Board of Direct Taxes)
Notification No. 26/2018-Income Tax
New Delhi, the 13th June, 2018
S.O. 2413(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 makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, vide number S.O. 1790(E), dated the 5th June, 2017, namely:-
2. In the said notification, in the Table, after serial number 17, the following serial number and entries relating
thereto, shall be inserted, namely:-3. This notification shall come into force with effect from 1stday of April, 2019 and shall accordingly apply to the Assessment Year 2019-20 and subsequent years.
[Notification No. 26/2018/F.No.370142/3/2018-TPL]
PRAVIN RAWAL, Director (TPL)
Note:- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(ii), vide number S.O. 1790(E), dated the 5th June, 2017.