So the Long Term Capital Gain=Selling Price-Indexed Cost of buying property=Rs.33,76,069. (Note-As per the below Cost of Inflation Index (CII), the CII rate for FY 2017-18 is 272 and for FY 2005-06, it is 117). However, if you do not consider the indexed cost, then in plain the gain may be said as Rs.1 Cr lakh (Rs.1.5 Cr-Rs.50 Lakh). The Cost Inflation Index are mainly used in the computation of long-term capital gains with regard to the sale of assets. Thus, indexation helps reflect the actual value of the asset at present market rates, taking into account the erosion of value due to inflation. Long-term capital gain = Selling Price – Indexed cost = 30,00,000 – 21,30,000 = Rs.8,70,000. Tax on capital gain = 20% of 8,70,000 = 1,74,000. Tax on capital gains without Indexation (for stocks and mutual funds): There is an option of not going the complicated route of indexation and directly computing capital gain tax. Suppose the property was purchased for 5 lakhs in 1988-89, the indexed purchase is 5 x 7.2 ~ 36 Lakhs. This is the indexed cost of acquisition. Suppose the current sale price Rs. 75 lakhs, then the capital gain = 75- 36 ~ 39 Lakhs. A tax of 20% (+cess) has to be paid on this amount. Post-budget capital gains tax computation: The discount method of calculating your capital gain Cost base You can use the indexation method to calculate the capital gain on an asset you acquired before 11.45am on 21 September 1999 and which you owned for 12 months or more. The calculation of cost basis becomes confusing when dealing with mutual funds because they often pay dividends and capital gains distributions usually are reinvested in the fund. For example, assume that you currently own 120 units of a fund, purchased in the past at a price of $8 per share, for a total cost of $960.
The Finance Ministry has notified 280 as the cost inflation index (CII) number for the Financial Year (FY) 2018-19. This CII number is important as it will be used to compute inflation adjusted long-term capital gains (LTCG) on assets such as house, gold, debt mutual funds (MF) etc. accrued in FY 2018-19 and consequently impacts the amount of tax payable on them. When it comes to calculating long term capital gains on property the cost inflation index for the financial year of purchase and sale helps and to a large extent reduces the seller’s tax liability in most cases. Cost Inflation Index is a measure of inflation under Section 48 of the Income-Tax Act. So the Long Term Capital Gain=Selling Price-Indexed Cost of buying property=Rs.33,76,069. (Note-As per the below Cost of Inflation Index (CII), the CII rate for FY 2017-18 is 272 and for FY 2005-06, it is 117). However, if you do not consider the indexed cost, then in plain the gain may be said as Rs.1 Cr lakh (Rs.1.5 Cr-Rs.50 Lakh).
Capital gains on property - short term and long term capital gains tax, Option to the taxpayer choose between old income tax rate and slabs and the new ones. Thus, income tax department in India allows indexing the cost price of property, 6 Mar 2018 577: Getting “Real” with Capital Gains Taxes by Adjusting for Inflation (PDF) Indexing assets prices for determining capital gains is good policy, but it and investment decisions to a greater degree the older people get. 20 May 2016 It comes in handy if you are planning to sell your old house for a new one or want to Capital Gains is the difference in the selling price and Indexed purchase As per Income Tax Act, Cost Inflation Index (CII) is a measure of
14 Dec 2016 Calculate the indexed cost of acquisition. To arrive at this figure, multiply the purchase price and improvement cost by the Cost Inflation Index (CII) 22 Jan 2018 It is always sad to say goodbye to an old friend, especially one which has been so helpful. Capital gains tax was invented in April 1965. Hence, taxpayers were given the option to rebase the cost of their assets at 31 March 2 May 2017 Calculate capital gains tax on sale of old jewellery based on fair market value at A. Capital gain is the excess of sale price over the cost of acquisition. This will be further indexed to make up for the inflation over the years.
When it comes to calculating long term capital gains on property the cost inflation index for the financial year of purchase and sale helps and to a large extent reduces the seller’s tax liability in most cases. Cost Inflation Index is a measure of inflation under Section 48 of the Income-Tax Act. So the Long Term Capital Gain=Selling Price-Indexed Cost of buying property=Rs.33,76,069. (Note-As per the below Cost of Inflation Index (CII), the CII rate for FY 2017-18 is 272 and for FY 2005-06, it is 117). However, if you do not consider the indexed cost, then in plain the gain may be said as Rs.1 Cr lakh (Rs.1.5 Cr-Rs.50 Lakh). The Cost Inflation Index are mainly used in the computation of long-term capital gains with regard to the sale of assets. Thus, indexation helps reflect the actual value of the asset at present market rates, taking into account the erosion of value due to inflation. Long-term capital gain = Selling Price – Indexed cost = 30,00,000 – 21,30,000 = Rs.8,70,000. Tax on capital gain = 20% of 8,70,000 = 1,74,000. Tax on capital gains without Indexation (for stocks and mutual funds): There is an option of not going the complicated route of indexation and directly computing capital gain tax. Suppose the property was purchased for 5 lakhs in 1988-89, the indexed purchase is 5 x 7.2 ~ 36 Lakhs. This is the indexed cost of acquisition. Suppose the current sale price Rs. 75 lakhs, then the capital gain = 75- 36 ~ 39 Lakhs. A tax of 20% (+cess) has to be paid on this amount. Post-budget capital gains tax computation: The discount method of calculating your capital gain Cost base You can use the indexation method to calculate the capital gain on an asset you acquired before 11.45am on 21 September 1999 and which you owned for 12 months or more.