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
If I sell my house in April 2021 what will be the cost of inflation as per income tax code
Sir,
I purchased a Ground floor flat for 5.25 lacs in 1994 in Sector 30 Gurgaon. I got the property registration done in November 2020.
I hope to sell the property for 1.20 Cr in March 2021.
What will be the Capital Gains please.
No website
I am planning to sell flat in March 21.
I did agreement in the month of March 2013.
Agreement value is 25 lacs, other expenses are 1.5 lacs stamp duty,25K registration cost,Service c tax and VAT is 1 lac.
What is present indexation value for the flat?
I have purchased house in 1985 for Rs 3,30,000/- and now selling in Feb 2021 for Rs 1,40,00,000/- How to calculate capital gain on that and how much tax I have to pay after buying a new house for Rs 22,50,000/-Please guide me.
Sir,
I bought a flat in 1982 at Rs 2.5 lacs .
Now I want to sell it at Rs 1.4 crore .
Please inform me how much tax I will have to pay.
I purchase 192.5 sq.yd.plot for Rs. 20,000/- in Mohali and constructed house in 1982 and spent Rs.90000/- on constructed. thereafter in 2005 I spent Rs. 4.00 Lac on its renovation. Now I want to sell it. What will be indexed cost of this house in 2022 ?
I purchased a shop with Rs.25000 in 1989-90 & the currently sale value is Rs.2500000. Capital gain will be apply or not, if apply than what the amount ?
Dear sir,
What will be cost inflation index for the year 1973? How will the capital gains tax liability will be calculated if a property bought in 1973 is sold in 2020-21?
I bought a house (flat) in Ahmedabad Satellite area, near Preranatirth temple in 1999-2000 in Rs.5.85 Lacs. What could be its price as per jantri at present i.e. in 2021. What should be the minimum price to be considered for calculation of stamp duty?
My father purchase house property on 1978 by Rs. 18000/- and sale on Aug, 2019 by Rs. 1325000/- how much tax liability on him for property gain.?
Wat wil long term capital gain on house bought in 1993 for two lac sixty thousand(2.60 lac) n sold for 55 lac in 2020.
I have purchased house in 1998-99 for 8 lacs and sell in 2020-21 @85 lacs . What will be my Property gain tax.
pl. guide in calculating capital gains tax on property acquired by My father in 1980 for 1,40,000 for 200 sq yards and sold one floor in 2020 for INR 75 lakhs . Thanks .
My father had purchased a site in 1976 by paying Rs. 10000..He built a house in 1977 by spending Rs. 100000…Further construction was done in 1995 by spending 200000…now we are selling the property for 12000000…What is the LTCG for this?
I had purchased a house in 1993 for RS. 1.65 lakh which was sold in feb 2020 for Rs.20 lakh.
My question is whether evaluation is reqd to be or tax liability can be calculated based on jantri/CII.
My tax liability may kindly be shown
How do you calculate LTCG for property bought in 1989 and sold in 2020.
Please arrange to intimate on my email id srnmum@gmail.com the capital gain tax applicable on flat to be sold for Rs 30 lakhs in the next month which was purchased in April 1995. Thanks a lot.
HOW SOULD I CALCULATE LTCG ON PROPERTY PURCHASE DURING 1996-97 AND SALE DURING 2019-20
Sir,
my grand father has purchased land in March 1941
how i will calculate capital gain for this year..
pl send formula
Regards
K B Varma
Bought flat @ 2006-07 – 24 L ( Bank Loan 20L – paid 37 L)
Improvement / Interior – 2 L
Sold flat @ 2020 – 2021 ( 75 L – 1.7 L (TDS + Travel + Commission )
Benefit under section 54* – How much ?
what would be the LTCG and Tax ?
Bought a house in 2002-03 for Rs.10 lakhs & improvement cost about Rs.3 lakhs at various stages. Now I am going to sell this property for Rs. 38 lakhs. What will be the capital gains tax? Shall I get the guidance please?
( He also sold his furniture (Household) for 10,000. The original cost of furniture 6,000. The furniture was purchased in July 2009 and was sold in December 2019
Cost Inflation Index for various years is as under
2001-02
2004-05
2005-06
2007-08
2019-2020
100
113
117
129
289
Sir,My father donate me the Ghar bari or say Bastu land with house build up by him at the consideration value Rs2,500.But I have sold it in fy 2019-2020 to some body.Now the question is what is the inflation rate as per Income tax act 1961.What cost I will take to file the return AY-2020-21.
a flat was purchased at96680further penalti of 8000 was paid.cost of improvement=186_24000 1993_25000 2005-27000 2006-30000 2012-250,000 & in 2021-37500.Allottment in 1985, Sold in Aug 3
2021 for 47,00,000,,,MY other income was4,02,201.
what is the tax liability.
a flat was purchased at96680further penalti of 8000 was paid.cost of improvement=186_24000 1993_25000 2005-27000 2006-30000 2012-250,000 & in 2021-37500.Allottment in 1985, Sold in Aug 3
2021 for 47,00,000,,,MY other income was4,02,201.@Previous Rates/
what is the tax liability.
Sir
I purchased a plot on 4.1.1992 for Rs. 92000/ and sold it on 17.07.2020 for Rs 36,63,000/ .the area of land is 233.33 sq. MTR and is situated in distt Ghaziabad up.
How much LTCG is to be paid by me.
Please give the calculation of LTCG also.
Sir
is cost inflation index applicable for-
(a) long term gains on equity? 2002 onwards; and
(b) long term on property?
What were concessions in budget of Government of India for the year 2020 – 2021?
“Last Updated on 13.06.2020”
Even so, the Example given under, –
“Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost “,
both the year of acquisition and of sale taken are anterior to FY 2001-02; hence no problem.
However, a controversy is most likely to arise- giving rise to disputes and litigation- only in a case in which the year of acquisition is anterior to FY 2001-02 but of sale happens to be posterior to FY 2001-02.
For an elucidation of the feared controversy, suggest to mindfully go through the related comment to that effect posted on earlier occasions; and, to own viewpoints, as discussed in an article published in TAXAMAN pointing out the fallacy and the attendant lack of clarity in the aftermath of the enacted change in ‘BASE YEAR’.
Purchased a flat in 1990. for rs 10 Lakh
Want to sell it now . What is considered to be its market price at present.
If property is purchased in 1994 and sold on 2009. How should I calculate Long term capital gain.
We had purchased a N.A. plot of land for Rs,X in 1998 and wish to sell it in 2019. The sale price would be Rs.Y. Could you please advise LTCG liabilities for us? There are no expenses except minor travel/conveyance related (not more than Rs.25,000/-) and brokerage /commissions paid of Rs.Z
If reconstruction takes place in 2012 after demolishing old structure build in 1985, can the value of old structure, after deducting depreciation, be claimed for arriving at Fair Value as on 01.04.01 for calculating LTCG for sale in 17-18. Completion of construction being March 14.
PLEASE HELP TO EVALUATE A RESIDENTIAL BUILDING CONSTRUCTED IN 1981 BY CII OR ANY OTHER METHOD.
Sir,
Please explain how to arrive the construction cost of a residential building constructed in 1981 using Inflation Index (CII) if possible, or Pls explain the valuation method to arrive the cost of construction of such a building.
OFFHAND
The subject Notification seems to be faulty in two respects:
(A) The Index for FY 2016-17 has been fixed much before the year end of Mar 31; which is not in accordance with the basis sec 48 provides.
(B) The base year has been changed from 1981 to 2001, but the old Index for 1981 been left untouched. So much so, property acquired before 1981 , if now sold, will, it appears, be denied the tax benefit on an amount equal to the Index for 1981.
Any scope for a different / better perception on the foregoing observations ?
OFFHAND
The Notification has prescribed the Index for FY 2016-17, prematurely, much before the year end of Mar 31, 2017 itself; unlike , as in the past, much after the end of a previous year. It is unclear, rather questionable, – how then the Index so fixed for FY 2016-17 could be claimed to have been computed strictly as per sec 48 ?
I have puchase a plot of 126 yard ( approx Registered amount Rs 150000/-) in year 2000 and constructed 2 storey over it in year 2000( ground floor) and 2005( 1st floor). Please suggest at what price we have to calculate the construction cost in year 2017 if we sale this house so that no income tax is liable on me.
I am selling the commercial open land of 1500sqft.which I got from my grandfather purchased in 1978,40,000sqft for approximately 10000/now I want to purchase agricultural land in rural areas, what will be the capital gain tax that I have to pay.
Cii applied on commercial property
Cii applied on sale of commercial property
My father bought a land for rs.26000/(2acre) Now it worth five crore.If I construct flats what will be the capital gains tax I have to pay? Whether it is single payment or one has to pay at the time of selling each apartment.land year of purchase 1979 and year of sale will be 2016.
Sir casin sold a piece agricultural land situated within 8km form municipal limit to a ltd developer in Chandigarh @41200000/acre with a unregistered sale agreement in DEC 2013 & received all the amount in July 2015 and handedhandedover the possession to dedeveloper.can he claim the capital gain tax
Dear sir,
What will be cost inflation index for the year 1974-75? How will the capital gains tax liability will be calculated if a property bought in 1974 is sold in 2014?
Already I Purchased land 2011-12 But not accounted income tax filing. If possible to account it now or in this financial year.
Plz reply me. Sir if today i sale a house property of rs. 35 lakhs What. Will be inflation or actual value of house in next 4. Years says in A.Y. 2020-21. The propert is at urban area
Hi Taxman,
I purchased a land costing 50,00,000 in 2011-12.cost of improvement Rs 30,00,000 in 2012-13,i given that land to one partnership firm for further development,i incurred 10,00,000 expenditure for that.can i claim that 10,00,000 as an cost of improvement? now i am divided that land into 130 plots.sold each plot 2,00,000 in 2015 may.but government value for each plot 2,50,000.what will be he capital gain? and what about that 10,00,000 expenditure?
Land purchased on 13/9/1991for 60000 want to sale now for 5000000(fifty lakhs).what will be capital gain tax
Sir,
I have purchased a house in Lucknow in 1996 for Rs. 1.82 lacs & get it registered in 2015 forit’s original cost of Rs 1.82 lacs. Now I am selling it for Rs.49 las. Now I want to know that how can I save the capital gain tax on it and how mumuch. OR if I will purchase a house at gurgoan for my son in joint name for Rs. 35 lacs. Than how much tax I have to pay.
My father bought house in Feb. 1992at Rs. 18000/- and now we are selling on 10th July 24 at 23,00,000/-lacs. How much will be capital gain and how much capital gain we have to pay?
What will be the inflation index for a property purchased by my father in 1956 for calculating capital gains tax in india?
i want to now dhukeswar darden, sardar patel marg, jaipur dlc rate since 1981 for income tax case
I purchased a flat in 1996 for 40000rs and sold it in 2015 for 1200000rs
how much tax will i have to pay.
Read after i’ll w’ll srprse now and thnk u.
I purchased a plot worth rs 225000/- in the year 2004 and later on i constructed a bungalow over it in the same year, which cost me rs.1250000/-. i have proof of my land purchase document,but i don’t have any details of construction work done(i.e.1250000/-)
How to calculate my gain tax for the year 2014-15 if i have sold this property for 7500000/-
my agreement value of flat is 88lacs
stamp duty paid is 1795000
registratin fee is 73350
other exps such as scanning fee is 19000
yr of purchase is 2005-06
what is index cost of acquisition???
Hi tax guru:-
My father bought house in Feb. 1975 at Rs. 25,000/- and now we are selling on 25 feb-15 at 98,00,000/-lacs. How much will be capital gain and how much capital gain we have to pay?