Cost Inflation Index – F.Y.2018-19 CII Announced

The notification no.26/2018 has published on 13th June 2018 to announce the cost inflation index for financial year 2018-19. The cost inflation index for financial year is 280. You can check the following table to know the cost inflation index from F.Y. 2001-02 to F.Y.2018-19.

New Cost Inflation Index Table

Sr.No.Financial YearCost Inflation Index
12001-02100
22002-03105
32003-04109
42004-05113
52005-06117
62006-07122
72007-08129
82008-09137
92009-10148
102010-10167
112011-12184
122012-13200
132013-14220
142014-15240
152015-16254
162016-17264
172017-18272
182018-19280

Amendment made by the Finance Bill 2017: Shifting base year from 1981 to 2001 for computation of capital gains (section 55) w.e.f. A.Y. 2018-19.

The finance bill 2017 has amended section 55 of the ACT so as to provide that the cost of acquisition of an asset acquired before 1-4-2001 shall be allowed to be taken as fair market value as on 1-4-2001 or the actual cost of the asset as cost of acquisition and consequently the cost of improvement shall include only those capital expenses which are incurred on or after 1-4-2001.

In the case of long-term capital gains, indexed cost of acquisition and indexed cost of improvement are deducted.

So how to calculate indexed cost of acquisition and indexed cost of improvement. The answer is with the help of cost inflation index. The following table contain cost inflation index up to F.Y. 2016-17.

Cost inflation index (CII) as notified by the central government is as under.

Cost Inflation Index From 1981-82 to 2016-17

F.Y.CIIF.Y.CII
1981-821001999-00389
1982-831092000-01406
1983-841162001-02426
1984-851252002-03447
1985-861332003-04463
1986-871402004-05480
1987-881502005-06497
1988-891612006-07519
1989-901722007-08551
1990-911822008-09582
1991-921992009-10632
1992-932232010-11711
1993-942442011-12785
1994-952592012-13852
1995-962812013-14939
1996-973052014-151024
1997-983312015-161081
1998-993512016-171125

How to calculate indexed cost of acquisition?

To calculate indexed cost of acquisition, you have to follow three points as given below.

  • Cost of acquisition (Your purchase price of property)
  • Cost Inflation Index of Previous Year in Which the Asset is Transferred (When Property Sold Out)
  • Cost Inflation Index of the year in which the asset was first held by the assessee or. 1.4.1981 (now 1-4-2001 w.e.f. F.Y. 2017-18) (whichever is later)

Now to calculate indexed cost of acquistion, use the following formula.

Cost of Acquistion (Purchase Price)  x CII of the year of transfer / CII of the year acquisition = Indexed cost of acquisition

Example to understand Cost of Inflation Index

  • A purchased a plot on 4-1-1978 for Rs.1,00,000/-
  • The land was sold by A on 1-6-2016 for Rs.18,00,000/-
  • The expenses on transfer were 2% of the sale price
  • The market value of the land as on 1-4-1981 was Rs. 1,20,000/-
Sale Consideration18,00,000/-
Less: Expenses on Transfer    36,000/-
Indexed cost of acquisition – 1,20,000 x 1125 / 100 =

  • CII of F.Y. 2016-17 is 1125
  • CII of F.Y. 1981-82 is 100
13,50,000/-

 

 

13,86,000/-

 

 

Long-term capital gain4,14,000/-

 

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5 thoughts on “Cost Inflation Index – F.Y.2018-19 CII Announced

  1. hi i would like to know how much income tax i need to pay if i sell plot of mine for rupees 50 lakh..which i purchased in 2009 for rupees 10 lakh

  2. If the immovable property is purchased well before the base reference year how to calculate the cost inflation index applicable to property if it is to be sold now

  3. I have incurred following costs on my residential property which I may want to sell soon.
    Cost – 6 lacs in 1997 – 98
    Maintenance paid to Society – about Rs.700/- pm for 18 years
    Registration cost – about Rs.1.0 lac in 2009
    What will be my exemption limit on sale value for assessment of tax. It may sell for about 40lacs now.

    • Mr. Anis,

      Whatever the cost of purchase may be, your CII will be

      Cost of Purchase X CII of Year of Sale made / CII of Year of Purchase

      like wise

      Cost of Improvement X CII of Year of Sale made / CII of Year of Improvement made

      after arriving the same, you can claim deduction of registration charges too

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