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| Personal Tax (Income Tax, Capital Gains,Wealth Tax) |
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| Cost Inflation Index |
| Understanding Capital Gains On Shares/ Securities |
| Income Tax Exemptions to Individuals / Hindu Undivided Family (HUF) |
| Ways to save on capital gain tax |
| Deduction Allowed to Individual & HUF from Gross Total Income |
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| COST INFLATION INDEX |
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The Cost of acquisition (Improvement) adjusted by Cost Inflation Index in the following manner will be deducted from the full value of consideration. Also, the expenses on transfer (legal fees brokerage, stamp duty etc.) will be deducted. The Net amount will be Long Term Capital Gains chargeable to tax under section 112.
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Cost of acquisition (improvement) x cost Inflation Index of the year in which the asset is transferred/cost Inflation Index of the year of acquisition or 1/4/1981 whichever is later.
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| Table for Cost Inflation Index |
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| S. No. |
Financial Year |
Cost Inflation Index |
| 1 |
1981-82 |
100 |
| 2 |
1982-83 |
109 |
| 3 |
1983-84 |
116 |
| 4 |
1984-85 |
125 |
| 5 |
1985-86 |
133 |
| 6 |
1986-87 |
140 |
| 7 |
1987-88 |
150 |
| 8 |
1988-89 |
161 |
| 9 |
1989-90 |
172 |
| 10 |
1990-91 |
182 |
| 11 |
1991-92 |
199 |
| 12 |
1992-93 |
223 |
| 13 |
1993-94 |
244 |
| 14 |
1994-95 |
259 |
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| S. No. |
Financial Year |
Cost Inflation Index |
| 15 |
1995-96 |
281 |
| 16 |
1996-97 |
305 |
| 17 |
1997-98 |
331 |
| 18 |
1998-99 |
351 |
| 19 |
1999-2000 |
389 |
| 20 |
2000-01 |
406 |
| 21 |
2001-02 |
426 |
| 22 |
2002-03 |
447 |
| 23 |
2003-04 |
463 |
| 24 |
2004-05 |
480 |
| 25 |
2005-06 |
497 |
| 26 |
2006-07 |
519 |
| 27 |
2007-08 |
551 |
| 28 |
2008-09 |
582 |
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Example: Mr. Harish Purchased 2 BHK Flat in Mumbai for Rs.90, 000 /- in the year 1978. The fare Market Value of the Flat on 1/4/1981 was Rs.2, 50,000 /-
Mr. Harish Sold the flat in the year Sept 2008 for Rs.48, 00,000 /-
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| LONG TERM CAPITAL GAIN CALCULATION: |
Sale Price of the Flat in Sept 2008 Rs.48, 00,000 Less
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| Fair Market Value as on |
| 1-4-1981 ---------- |
2, 50,000 |
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2, 50,000
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| Indexed Cost of acquisition |
| 2, 50,000 x 582/100 |
Rs.14, 55,000 |
| Brokerage & Legal Charges |
45,000 |
| Long Term Capital Gains |
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| Chargeable to tax 112 (1) (a) (ii) |
Rs.33, 00,000 |
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