cost inflation index cii

Cost inflation index ( capital gain index) chart for FY 2001-02 to FY 2019-20

Cost inflation index ( capital gain index ) is useful to calculate long term capital gain. Indexation can help you to save long term capital gain.Here I present table of index for financial year 2001-02, to 2019-20.

 

Cost inflation index chart ( CII) – FY 2001-02 to 2019-20:

Financial Year Cost Inflation Index (CII)
2001-02 (Base year) 100
2002-03 105
2003-04 109
2004-05 113
2005-06 117
2006-07 122
2007-08 129
2008-09 137
2009-10 148
2010-11 167
2011-12 184
2012-13 200
2013-14 220
2014-15 240
2015-16 254
2016-17 264
2017-18 272
2018-19 280
2019-20 289

How to use index chart?

The index is for particular year. The year when transaction actually takes place. We can increase past cost by using cost inflation index.

Recommended read:

easy way to understand capital gain

Example for use of index:

Suppose Mr. A purchased plot at Rs. 10,0000 in the year 2011-12. He sold the plot in the financial year 2018-19 for Rs. 3,00,000.

Gain: gain is long term because asset is held for more than 36 months. So we can use index table.

Capital gain = sale value less indexed cost of acquisition.

sale value = Rs. 820000

Indexed cost = purchase price/ cost inflation index for year of purchase * CII for year of sale

= 10,0000/184*280 = Rs. 152170

Capital gain = Rs. 667830

Who notified  capital gain index?

It is notified by central government every year with regards to 75% of CPI for urban non manual employees for the previous year.

Cost inflation index for properties purchased before 2001?

When property has purchased before 2001, fair market value of property on 1/4/1981 should be computed and CII of 2001 – 100 should be considered to compute indexed cost of acquisition.

Example:

Suppose land was purchased in 1999 for Rs. 45000. It is sold in financial year 2018-19 for 12,00,000. Fair market value on 1/4/01 is 55000. In this case, we compute long term capital gain as per following.

Indexed cost = 55000/100*280 = 154000

Sale value = 12,00,000

Capital gain = 10,46,000

Note: To compute capital gain, fair market value as on 1/4/2001 or actual purchase value, whichever is more can be considered for cost of acquisition.

(You can download utility of income tax from our site or income tax website)

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