//Cost Inflation Index (For Capital Gains)

Cost Inflation Index (For Capital Gains)

In case of capital gains when long term capital gain is to be computed, then, indexation comes into picture to compute the indexed cost of asset as well as indexed cost of improvement. Indexation is not possible without a predefined index. Indexation is necessary to compute the present value of asset as on the date or year in which the asset is sold as compared to the year in which it is purchased. Cost Inflation Index (CII) chart begins from year 1981 with base index as 100. Indexation can help you reduce the tax liability by enhancing or bringing the value of the asset to present time.

Cost Inflation Index (CII) is notified by Government of India by publication in official gazette every year.

Cost Inflation Index Table for capital Gains

Financial Year Cost Inflation Index Financial Year Cost Inflation Index
1981 – 82 100 1982 – 83 109
1983 – 84 116 1984 – 85 125
1985 – 86 133 1986 – 87 140
1987 – 88 150 1988 – 89 161
1989 – 90 172 1990 – 91 182
1991 – 92 199 1992 – 93 223
1993 – 94 244 1994 – 95 259
1995 – 96 281 1996 – 97 305
1997 – 98 331 1998 – 99 351
1999 – 00 389 2000 – 01 406
2001 – 02 426 2002 – 03 447
2003 – 04 463 2004 – 05 480
2005 – 06 497 2006 – 07 519
2007 – 08 551 2008 – 09 582
2009 – 10 632 2010 – 11 711
2011 – 12 785 2012 – 13 852

The above chart can be used for computing the indexed value of asset and improvement. Formula to compute indexed cost and improvement has been in the following article.

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