Cost of Inflation Index from FY 2017-18 or AY 2018-19 for Long Term. Capital gain is the profit you make on selling an asset. It can be stock, real estate, mutual funds, jewellery etc. If you are selling an asset after one year from the date of its purchase, the profit becomes a short term capital gain. If you are selling the asset after 36 months from the date of purchase, it becomes a long term capital gain. Hence, the government charges capital gains tax. The government charges tax on our sale of the asset and they do not wish to let go of the capital gain. Cost inflation index India is an index issued by the Central Board of Direct Taxes and the figures keep changing every financial year.
The formula for calculating the new Purchase price using Cost of Inflation Index is as below.
Indexed Cost of Acquisition = (Cost of Acquisition * Cost of the Inflation Index (CII) for the year in which the asset was sold or transferred.)/ The cost of Inflation Index (CII) for the year in which the asset was first held by the assessee OR FY 2001-02, whichever is later.
As per Notification no. So 1790(e)[no. 44/2017 (f. No. 370142/11/2017-tpl)], dated 5-6-2017, following table should be used for the Cost Inflation Index :-
|Sl. No.||Financial Year||Cost Inflation Index|