How is property indexation calculated in India?
Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost. For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold in A.Y. 2009 -10 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh.
How indexation is calculated on property sale?
The indexation factor can be calculated by dividing the Sale Year’s Cost Inflation Index by the Purchase Year Cost Inflation Index. Once this has been determined, the indexed acquisition cost of the house can be calculated by multiplying the initial purchase price of the house and the indexation factor.
What is the indexation rate for 2020 21?
301
The Central Board of Direct Taxes (CBDT) notified the cost inflation index (CII) for FY 2021-22 as 317 via a notification dated June 15, 2021. For the previous year, i.e., FY 2020-21, CII was notified as 301….
| Financial Year | CII Number |
|---|---|
| 2021-22 | 317 |
| 2020-21 | 301 |
| 2019-20 | 289 |
| 2018-19 | 280 |
What is the cost inflation index for FY 2021 22?
317
The Cost Inflation Index (CII) for the financial year 2021-22 is 317.
How is Ltcg calculated?
The long-term capital gain will be the difference between the selling price of the asset and the actual cost of the acquisition, which is Rs 100 (Rs 300 – Rs 200). Example 3: You have purchased an equity share on 01 February 2017 at Rs 200. The fair market value as of 31 January 2018 was Rs 250.
How do you calculate capital gains on sale of property in 2021?
In case of short-term capital gain, capital gain = final sale price – (the cost of acquisition + house improvement cost + transfer cost). In case of long-term capital gain, capital gain = final sale price – (transfer cost + indexed acquisition cost + indexed house improvement cost).
How is Ltcg calculated on property?
Long-term capital gain = Final Sale Price – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where: Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.
How can I save capital gains tax on sale of residential property in India?
One of the ways to save on your capital gains tax is to invest in bonds within six months of the trading of the property and receiving the gains. On investing in bonds, you can claim a tax exemption under Section 54EC of the Indian Income Tax Act, 1961.