Cost Inflation Index for financial year 2013-14:
COST INFLATION INDEX FOR FINANCIAL YEAR 2013-14:
Under the Income Tax Act (‘ITA’), capital gains on transfer of an asset are computed by determining the difference between the full value of consideration and cost of acquisition and improvement. In case where the asset is considered as a long term capital asset as per the definition under the ITA, instead of the actual cost, the indexed cost of acquisition / improvement has to be taken into consideration. Indexed cost of acquisition / improvement is to be computed by multiplying the cost with the Cost Inflation Index (CII) for the year in which the asset is sold and divided by the CII for the year in which the asset was acquired / improved. In such cases, the difference between indexed cost and the full value of consideration shall be considered as long term capital gains chargeable to tax.
CII is notified by the Central Government every year in its official gazette.
For financial year 2013-14, the Government has recently notified the CII to be 939. Thus while determining the long term capital gains on the transfer of any long term capital asset effected at any time during the financial year 2013-14 relevant to the assessment year 2014-15, indexed cost of acquisition and indexed cost of improvement has to be calculated as follows:
Indexed cost of acquisition / = Cost of acquisition/ * 939
improvement improvement CII of year of acquisition/ improvement
The taxpayers can now use this CII for calculating their long term capital gains for A. Y. 2014-15 especially for the purpose of calculating and paying advance tax.
For the benefit of the tax payers, below is the list of CII since inception:
Financial Year | CII | Financial Year | CII | |
1981-82 | 100 | 1998-99 | 351 | |
1982-83 | 109 | 1999-00 | 389 | |
1983-84 | 116 | 2000-01 | 406 | |
1984-85 | 125 | 2001-02 | 426 | |
1985-86 | 133 | 2002-03 | 447 | |
1986-87 | 140 | 2003-04 | 463 | |
1987-88 | 150 | 2004-05 | 480 | |
1988-89 | 161 | 2005-06 | 497 | |
1989-90 | 172 | 2006-07 | 519 | |
1990-91 | 182 | 2007-08 | 551 | |
1991-92 | 199 | 2008-09 | 582 | |
1992-93 | 223 | 2009-10 | 632 | |
1993-94 | 244 | 2010-11 | 711 | |
1994-95 | 259 | 2011-12 | 785 | |
1995-96 | 281 | 2012-13 | 852 | |
1996-97 | 305 | 2013-14 | 939 | |
1997-98 | 331 |