Article discusses Meaning of Cost Inflation Index (CII) which is used for Computation of Long Term Capital Gain. Cost Inflation index are Notified by CBDT every year and till date CBDT has notified Cost Inflation Index for the Financial Year 1981-82 to Financial year 2024-25. Cost Inflation index are used for computing indexed cost of acquisition.
What is Cost Inflation Index (CII)?
It 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 Income-Tax Act defines the index as what is notified by the Central Government every year, having regard to 75 per cent of average rise in the consumer price index (CPI) for urban non-manual employees for the immediately preceding previous year. Therefore, if we consider that price of a capital asset has risen in tandem with base price rise, then if one want to sell an asset and replace it, the cost allowed even after indexation will be lesser than the price payable for new asset. However, in case of many capital asset the price rise is lesser than market price and in many cases it is higher.
How does Cost Inflation Index (CII) help in capital gains computation? Capital gain, as you know, arises when the net sale consideration of a capital asset is more than the cost. Since “cost of acquisition” is historical, the concept of indexed cost allows the taxpayer to factor in the impact of inflation on cost. Consequently, a lower amount of capital gains gets to be taxed than if historical cost had been considered in the computations.
Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost.
For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold in A.Y. 2009 -10 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh. And the long-term capital gains would be Rs 21.51, that is Rs 80 lakh minus Rs 58.49 lakh.
Cost Inflation Index:- Cost inflation index (CII) as notified by Central Government alongwith analysis of the same is as under:
Cost Inflation Index As Applicable From Financial Year 1981-82 To Financial Year 2016-17
| FINANCIAL YEAR | COST INFLATION INDEX | Increase in CII and 75% of percentage of real inflation allowed | Real inflation % of CII Increase allowed / 3 X 4 |
| 1981-1982 | 100 | ||
| 1982-1983 | 109 | 9 = 9% | 12% |
| 1983-1984 | 116 | 7= 6.422 | 8.56% |
| 1984-1985 | 125 | 9=7.7586 | 10.34% |
| 1985-1986 | 133 | 8=6.4 | 8.53% |
| 1986-1987 | 140 | 7=5.263 | 7.02% |
| 1987-1988 | 150 | 10=7.1428% | 9.52% |
| 1988-1989 | 161 | 11=7.333% | 9.78% |
| 1989-1990 | 172 | 11=6.8323% | 9.11% |
| 1990-1991 | 182 | 10=5.8139% | 7.75% |
| 1991-1992 | 199 | 17=9.340% | 12.45% |
| 1992-1993 | 223 | 24=12.060% | 16.08% |
| 1993-1994 | 244 | 21=9.4170% | 12.56% |
| 1994-1995 | 259 | 15=6.1475% | 8.20% |
| 1995-1996 | 281 | 22=8.494% | 11.33% |
| 1996-1997 | 305 | 24=8.5409% | 11.39% |
| 1997-1998 | 331 | 26=7.8549% | 10.47% |
| 1998-1999 | 351 | 20=6.0423% | 8.06% |
| 1999-2000 | 389 | 38=10.826% | 14.44% |
| 2000-2001 | 406 | 17=4.370% | 5.83% |
| 2001-2002 | 426 | 20=4.926% | 6.57% |
| 2002-2003 | 447 | 21=4.93% | 6.57% |
| 2003-2004 | 463 | 16=3.58% | 4.77% |
| 2004-2005 | 480 | 17=3.67% | 4.90% |
| 2005-2006 | 497 | 17=3.54% | 4.72% |
| 2006-2007 | 519 | 22=4.43% | 5.90% |
| 2007-2008 | 551 | 32=6.17% | 8.22% |
| 2008-2009 | 582 | 31=5.62% | 7.50% |
| 2009-2010 | 632 | 50=8.60% | 11.46% |
| 2010-2011 | 711 | 79=12.36% | 16.49% |
| 2011-2012 | 785 | 74=10.41% | 13.88% |
| 2012-2013 | 852 | 67 = 8.54% | 11.38% |
| 2013-2014 | 939 | 87 =10.21% | 13.62% |
| 2014-2015 | 1024 | 85 = 9.05% | 12.07% |
| 2015-2016 | 1081 | 57 = 5.57% | 7.42% |
| 2016-2017 | 1125 | 44 = 4.07% | 5.43% |
Cost Inflation Index from Financial Year 2001-02 to Financial Year 2024-25
In order to revise the base year for computation of capital gains, section 55 of the Income Tax Act, 1961 was amended vide Finance Act, 2017 so as 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 1st April, 2001 and the cost of improvement shall include only those capital expenses which are incurred after 01.04.2001. Cost inflation index for Long Term Capital Assets sold after 01.04.2017 as notified by CBDT Notification No. 44/2017 dated 05.06.2017 as amended from time to time.
| TABLE | ||
| SI. No. | Financial Year | Cost Inflation Index |
| (1) | (2) | (3) |
| 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 |
| 20 | 2020-21 | 301 |
| 21 | 2021-22 | 317 |
| 22 | 2022-23 | 331 |
| 23 | 2023-24 | 348 |
| 24 | 2024-25 | 363 |
Last Updated on 25.05.2024
(Republished with Amendment, Source -Income Tax Website)
Author Bio
MY FRIEND HAD purchased onr plot for rs 606000 but forget to get the registry which was done in 2008 & paid rs 292000 for registry maintain charges .In oct 2010 MY FREIEND sold the plot for RS 4500000. WHAT WILL BE CAPITAL GAIN ? IN CASE MY FREIEND WANT TO BUY CAPITAL BOND WHAT WILL BE THE VALUE REQUIRED? IN CASE HE WANT TO INVEST THE CAPITAL IN SOME NEW OLOT WHAT IS THE PERIOD AVAILABLE FOR THE SAME ?
I Have purchased a Flat on March 2006 for Rs 660000. I had taken a Loan for Rs 5 .25 lac for the same and borrowed some money from my relative of around 1 lac. I had repaid prinicpal outstanding of my loan upto Rs 4 lac by taking a personal loan in 2009. I had spend roughly 1 lacs of Rs towards improvement cost Now I shall be selling this property for Rs 21 lacs. Can you please let me know what would be my actual capital gain. considering all loans that I have taken and repaid. and other costs of improvement
Dear Sir,
In the year 2006-07, I bought one flat in 12 lacs. I have sold this flat in december 2010 in 37.5 lacs. I have spent in brokerage (in selling) etc expenses as 1.4 lacs. As per my understanding the capital gain would be Rs 19.66 lacs. I am planning to re-invest Rs 20 lacs in buying a new flat in june 2011. So i should not attract any capital gain tax from above property as I am re-investing more money that capital gain!
Is it correct ?
Hi sunil,
unless we get the date of purchase(allotment), we can’t ascertain whether it is long term/ short term. If long term capital asset(other than a residential property), the gain can be invested in residential house(not necessarily occupied).See section 54F of the income tax act.See also section 54 in the case of residential property
regards
rajesh
Dear sir,
I had purchased a property at Jaipur, direct allotment from Jaipur development authority for 2 lac Rs. (incl registry and lease).
I sold the property on 5 jan 2011 for 10 lac Rs . How much capital gain I need to pay . Can I reinvest this in property to save capital gain tax.
Regards
sir, In my grandap property, J P Nagar 7th phase area, my mother got share 3.21 with parition 1973, further no any transaction in land. In 2005 our family, in 35 guntas, we divide the into 5( 7X5= 35gunts) parts with reg parition to gave to JV ,each of us got 5 flats among them my mother selling the flat of 1765 sft, with undivided share for 1765 sft is 832 sft.
To avoid capital gains,
Current guiadance value 1430 sft X 1765=2523950+ 1,00000 car parking= 2623950.
Now we r one dd for 2624000, other dd : 376000 with same nationalized bank a/c no.
we are giving with additional work like wood,tiles, grill,slide windows,ups, hardware, another fresh painting work , 8 to 9 lacks work, we have 6 lacks tax bill, 3 lacks odd bill to avoid capital gain tax.
i came to know current infaltion is 711 / 800
800*1765 =1412000
car parking = 100000
additional work with & with out tax bill = 900000
total = 25,12,000,
for remaining 4 lacks we have pay long term tax,
Now how much capital gain tax we have to pay, other option please let us know
land purchased in 2002-03 for Rs:66000/-ground and first floor constructed in 2007-08 by rs:1800000/-now ia am selling at rs:3200000/-what will be the tax? please
Dear Ruchir
In case of property purchased before 01.04.1981 , the cost of acquisition will be mostly consist of cost of land ie. circle rate of the property on 01.04.1981, such cost will be indexed using cost inflation index as per income tax act.eg if you using circle rate the cost comes to 10000.00 as on 01.04.1981 then as per current inflation index it will be 71100.00.Now you will have to deduct the sale consideration from cost of acquisition to calculate long term capital gain.
for exemption you can purchase bonds, exemption is the amount of capital gain you invest in bonds.
dear sir
we have a 70 year old ancestral property , the current actual sale price of property is 1.00 cr, i want to ask what will be the actual amount of capital gain,also if i dont purchase any property or invest in bond then how much capital gain i have to pay , do we have to invest in bond and purchase a property within 6 months , can we invest 100% of total amount in bonds , is income from bonds taxable again or not
By this mail i sending my problem. I will be highly oblige to you if you can give me reply as early as possible.
1. I purchased one bungalow on 17.2.1973 in housing society from one member and paid Rs. 51,000.00 by cheque. Housing Loan optian by the society require to be paid as per the terms of Rs. 19,000.00.
2. In the year 2005 i decided to purchase another bungalow from one enterprise (builder). As per the scheme i have to pay Rs. 3,84,000.00 for land which belong to the society. I paid that amount on 31.05.2005 on that day Registrar Document was executied in my favour by the Society and enter in to contract for the contraction of bungalow with construction company (builder) on 3rd June, 2005 for Rs. 17,00,000.00 in the said agreement it specifically mention that after making full payment bungalow will be handed over to you. I paid up the entire amount on 06.01.2006 and allotment letter was issued by the society on 01.10.2006 and thereafter i disposed of my old bungalow on 09.08.2007 for Rs. 23,000.00.
My question is can i get benefit of S. 54 of I.T.Act, 1961?
Whether I.T. department can rais a question that i paid Rs. 3,84,000.00 and executied Registrar document of land in my favour and from that date will be counted that you have purchase bungalow on that day you are not entitle for the benefit of S. 54 before one year?
New Bungalow contracted by the builder and allotment made by the Society whether it can be said that allotment/possession given by the builder on 01.10.2006?
Can I.T. Dept. demand capital gain from me for disposal of old bungalow purchase in the year 1973 and sold it in the year 2007.
Sir, i will be high oblige to you if i can get answer from you as early as possible.
thanking you,
yours
Sir,
I purchased a flat in Oct 2007 for Rs 22 lacs + 2 lacs of stamp duty + 40,000 brokerage.
Now i sold the flat in Nov 2010 for Rs 32 lacs and paid 40,000 brokerage.
I ALSO PAID 3 lacs of interest during ownership period for the home loan.
what will be my tax liability.
Thanks
Sir,
Can stamp duty and registration fee paid on the sold flat to be part of the cost of the sold property to calcualte capital gain.
Similarly is it possible to add the registration and stamp duty charges of the new flat (purchasing) to calculate the capital gain?
old flat rate = r Stamp+regd fee = s improvement = i
new flat rate = n stamp+regd fee = ns
Can I calculate the capital gain as
(n+ns) – indexed (r+s+i) ?
Thanks in advance
I have purchased a land for 0.7 Lakhs during 1989-90. Stamp duty paid = Rs.15688. Brokerage Commission Paid =Rs 5000.00. Land development on the same year = Rs 2000.Further i have constructed a house for 7.2 Lakhs during 1990-1991. Fencing charges during 2007-08 = Rs 20000.00, Patta = Rs 2,000. Civil case 2007 to 2010(Court & Lawyer expenses) = Rs 40000.00.
I have sold this property during 2010 -11 for 28 lakhs. Out of which i have paid brokerage commission as Rs.0.56 Lakhs and incidental charges as Rs 5000.00
1. Whether it attracts capital gain tax if so How much i am liable for Capital gain tax during this year?.
2. If capital gain tax to be adjusted, for how much i need to purchase a land during this year?
3. I am a senior Citizen age of 71 years. Is there any concession?
Please clarify these questions.
Siva
i have purchased a plot of 178 sq yards 2 months back… and now i have sold a house measuring 80 sq. yards… plz tell me whether the capital gain on the house sold by me can be adjusted against the plot which i bought 2 months back or not.
Sir,
I purchased a flat at kolkata in 1993-94 at Rs 3Lakh+ Rs 30000/- stamp duty. I am selling the flat at Rs 17 Lakh. What will be the capital gain & I want to reinvest the sale proceeds in buying another apartment where I have to pay Rs 40Lakh in instalments for a period of 3 yrs during 2010-11. In what scheme the sale proceeds of old flat can be kept both to mitigate capital gain as well as I can make the payment of instalments of new flat.
Sir, I have purchased a plot with residential house on it in 1996 for Rs.130,000/- Now I want to sale that property for Rs.13,75,000/- in 2010. How much tax did I have to pay on this capital gain. Or is there any provision to avoid tax.
Sir,
I had purchased a flat in 1996 and got possession in 1998 for Rs 5,10,000/-. I have made sale deed for Rs 30,50,000/- in 2010.
I have received part amount of Rs 5,50,000/- and put in CG A/c.
I have also made a deal for purchase of flat for Rs 59,00,000/-.
I have paid the amount received from the sale ie Rs 5,50,000/- but will receive the remaining amount after one month but I have to make the payment to builder for remaining amoun.
can I claim the LTCG benifit even if I am not able to pay from the proceed received from sale of property, which I will receive in one months time.
Please reply urgently,
Thanks,
BLS
How to arrive at CII for the property purchased in 1950
intended to be sold in FY 2010/11
Dear Sir
I bought flat on 30/01/1980 at a price 27,552/-, shall be selling now at 35,00,000/-. How to arrive at tax liability, pl. help.
I do not want to go for new residential property & also not much interested in Govt bonds, whats the way out to save tax??
My cost of acquisition was Rs 11,80,000, cost of improvement 270000, bought the flat in march 2001, sold the flat in aug 2010, @ Rs 3550000. only a commission of 71000 paid to broker as cost of transfer. pls advise the capital gain and the taxibility in this case.
Rdgs
Sanjeev
I purchased property for Rs 0.30 lac in 1985 and invest on it RS 20 lac in 2005. I like to sale it fir 1.o5 cr. What is the current cost as per cost index
how to calculate IT? if bank intrest:1036 , long term capital gain:448841 short term capital gain :894 , income from rent 225000, and income from other source 347478, Advance tax paid 25000,lic 101508, medicliam 6990 and tds recd.25000 ?
F.Y 2009-10,
Dear Sir,
Father house constructed in 1985-86 given to younger sister in 2010 and she intends to pays 10 lacs each to mother, brother and another sister in US through a bank loan after registering the property on her name. We all three individually have planned to invest the LTCG (with exemptions) in NHAI for 3 year period which is approx Rs. 3,30729 after deducting the indexed cost of improvement.
1. Does indexed cost of improvement apply to all three of us as two major repairs were undertaken (1989-90 & 2008-09) for 50k and 1.5 lacs respectively?
2. Of the 10 lacs only 3,30,729 is LTCG and do we have to pay income tax for the balance 6,69,271 individually? My mother is not employed, I am self employed and my sister is working in US.
3. Do we also have to pay income tax on the interest earned on the LTCG deposited with NHAI?
Regards
Murali
we (me & my wife) acquired as residential property in 1996 and selling the same in september-2010. sale cosideration is to be distributed 50% each. Now we want to buy two seprate residential properties by investing 100% share of each receipients seprate names. Please tell me the applicability of capital gain tax on this.
Property purchased jointly by three A-60%,B-15%&C-25% in 1991-1992 Total Cost Rs 10.10 Lac. Here C is father of B.
After death of C in 2005 B got share of his father per registered will.Now share in joint property of B is 15+25=40%
B is going to sell his portion in 2010-2011 for 60.00 Lac and shall invest in flat to be free from capital gains.
B Plan to sell father,s portion in 2011-2012 at 1.00 Crore and plans to buy another flat and invest to be free from Capital gains.
Kindly let me know weather I can buy Two flats in this manner or I will be liable to pay Tax on second flat. alternatively what is the best remedy to be free from long term capital gains tax obligations
I purchased a property from DDA in 1983 for Rs. 80,000.00. I want to sell this property and likely sell amount may be s. 60.00 lakhs or more.
I am holding an NRI status since 1995 and holding a permant resident status of Australia.
I had booked an apartment from Ramprastha builder about two years ago and its possession was received in July 2010. The total cost of this apartment is around 50 lakhs and the amount was paid from my NRI account.
Can the capital gains be adjusted against the purchase of this apartment ?
If not what shall be the tax planning. Have I to purchase another property or can I invest the capial gains in other sources like shares etc.
what is difference between the sec 80DD and 80DDB ? reply
I have sold property to Rs. 600000/- in oct, 2009 which was purchased in year 2005 @ Rs. 375000/- Full of amount of sale proceeds has been used to purchased new flat @1850000/- with adding acquisiton cost of st. duty & registration charges of Rs. 112500/- Further, amount of Rs. sale proceed was equally receive in my & my father a/c as sold property was under joint ownership. Please let me know whether i am applicable for tax payment or not under LTCG or STCG, if taxable, please let me who will need to pay tax, wthether son or father
I have sold property to Rs. 600000/- in oct, 2009 which was puuchased in year 2005 @ Rs. 375000/-. please let me know wether i am applicable for tax payment or not under LTCG or STCG.
Sir, I hv sold a property i purchased in 2002 this year 2010. Part of the proceeds hv gone towards closing my HL. I propose to buy a new property from the sale proceeds. Do i get any exemption for Long Term Capital Gains on account of the repayment of the HL
Sir,
I purchased a flat at Kolkata in September 1999 for Rs.4,90,000/- and sold the same in May 2010 for Rs.11,00,000/-.How cost inflation index will be applied in my case and accordingly what will be my resultant Income Tax liability. Kindly advise and oblige.
KumKum Das
Sir, I have purchased land in 1999 and sold it in 2009 at a profit. Also, I have a flat purchased in 2005 by taking housing loan. Now can i repay the housing loan using the profit received by sale of the land, without paying any tax. please clarify
what is the cost of inflation factor for the financial year 2010-2011
sir i have sold residential NA plot
1. can i buy a flat and avoid capital gain tax
2.within what period i have to buy the new property.
3.till then can i put the money in mutual funds / shares / normal deposites
please guide..
thank you
praveen chhajed
what is the cost of inflation factor for the financial year 2010-2011???
Purchased residential plot on 23-March-1981 for Rs Rs 10,000. Sold it for Rs 20,00,000 on 15-June-2010. Please help me with my tax liability.
@Baburaj,
full consideration = 19,80,000
cost of acquisition = 2,970,00 + 40,095 + 22,562 + 27,563 (some components mightcost of improvement = 0
indexed cost of acquisition = 3,87,220*632/447 = 5,47,479
indexed cost of improvement = 0
long term capital gains without exemption = 19,80,000-(5,47,479+0) = 14,32,521
cost of new asset = 15,00,000
14,32,521 < 15,00,000
See <a href="http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITActhence net long term capital gains = 0.
I would like to know when will the government release the cost inflation index for F.Y. 2010-2011. I have sold a flat in June 2010 and I want to calculate how much deduction can I get on that flat. When do I need to pay the advance tax or where can I invest?
@Aparna,
You cannot file a revised return beyond one year from the end of the assessment year (or two years from the end of the financial year) except probably in response to a notice from the assessing officer.
Also note that in the absence of any voluntary disclosure of income scheme, if it comes to light that income has been under-reported for two years, this might trigger reassessment for many more years.
Your best bet is probably to report the income from that bank account in line with your conscience!
@Ramesh C
You have to get the cost of acquisition of the property, or get a valuation officer to determine its fair market value as of 1 April 1981. You can use the higher of the two as the cost of acquisition C.
Without this, you might be liable to tax on full 420L/7 assuming zero cost of acquisition!
You could also work out the cost of improvement of the ancestral property if any.
full consideration = 420 L/7
cost of acquisition = C/7
cost of improvement = (? + ? + …)/7
indexed cost of acquisition = C*632/100/7 = C * 6.32/7
indexed cost of improvement = (?*632/? + ?*632/? + …)/7 (depending on year of improvements)
long term capital gains = [420 L – (C*6.32/7+?)]/7
tax = 20% of gains
education cess = 3% of tax
@Pradip Joshi/Pradeep,
Exemption for capital gains tax by investment in new house applies for short term capital gains only in case of compulsory acquisition of industrial undertakings Profit on sale of property used for residence> — note insistence on “long term”, Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases.
@Pradip Joshi/Pradeep,
Exemption for capital gains tax by investment in new house applies for short term capital gains only in case of compulsory acquisition of industrial undertakings ( — note insistence on “long term”,).
@Yogendra Singh/vikram,
full consideration = 1,35,00,000
cost of acquisition = 63,00,000
cost of improvement = 0
indexed cost of acquisition = 63,00,000*632/480 = 82,95,000
indexed cost of improvement = 0
long term capital gains = 1,35,00,000-(82,95,000+0) = 52,05,000
tax = 20% of 52,05,000 = 10,41,000
education cess = 3% of 10,41,000 = 31,230
due date to avoid interest = 15 March 2010
I have purchased flat on aug 2001 at Rs 3,38,300/- and sold the same at Rs 10,00,000/- on nov 2009.
I have not purchased any flat uptill now.
Kindly show me the tax to be paid & calculation for it.
I have purchased flat on aug 2001 at Rs 338300/- and sold the same on nov 2009.
I have not purchased any flat uptil now.
Kindly show me the tax to be paid & calculation for it.
Sir,
i want to know the cost inflation index for the year 2010-11
dear sir
we have a 70 year old anscestral property and purchase price was equal to negligiable , the current actual price of property is 3.50 cr, i want to ask wht will be the actual amount of capital gain if i sell it in 2010 ,also if i dont purchase any property or invest in bond then how much capital gain i have to pay , do we have to invest in bond and purchase a property within 6 months , can we invest 100% of total amount in bonds , is income from bonds taxable again or not
Sir,
I wants know about sale of a housing plot (No building)
The property was purchased on 25/7/2002 @ 2,970,00/- + stamp Duty 40,095/- + Betterment 22,562/-+ Registration, Tax 27,563/-, No receipt for brokerage and sale writing fees etc.
I sold it for Rs. 19,80,000/- on 27/11/2009
I am registering a new property (land+ building) for an agreement value of Rs 15,00,000 on 8th April 2010
Kindly let us know whether I am liable to pay any tax.
dear sir,
I have an agriculture land about 2 hectare since January 1995. This land transferred from other person to my name by revenue departement on the basis of possession of land.
Now I want to sale my agriculture land as residential plots from March 2010.How can calculate my tax liabilites or capital gain .Please suggest me how to treat this.
I have submitted my IT return for the Last 2 years, but at that time one of my bank account was not disclosed. now i want to show that bank account at the time of filing return, please suggest me how to treat this.
Thank you.
We have an ancestral property in Chennai which is more than 40 years old. The property is for sale. Please let me know how cost inflation index is calculated for arriving at capital gains tax. We are 7 beneficiaries expecting an amount of approx. Rs. 420 L against sale of property
What is current cost value of ancestral property bought in १९६० in rs. ५००