Cost Inflation Index (CII) for PY 2019-20/ AY 2020-21 Notified by CBDT at 289 (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.

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
19 2019-20 289

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One Comment

  1. vswami says:

    “19 2019-20 289”

    This has been notified long before the outbreak of the corona 19. Since then there has been a sea- change in the national economy. Further, transfers of capital assets though made anterior to the year end of 31-03-2020,- for the purpose of taxation of capital gains- by virtue of the extended date of 30-06-2020 – are to be regarded as transfers as were made before 31-03-2020.

    To one’s understanding, therefore, the CII as originally fixed at 289 , might, logically speaking, require to be refixed and increased suitably so as to reflect the land slide in the economy.

    Any thoughts and viewpoints to eminently spare and share !

    OVER to the FM/ CBDT for favourably due consideration !!!

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