CBDT has notified the Cost Inflation Index (CII) for Financial Year 2015-16. Cost Inflation is required to calculate Long term capital gain under Income Tax Act
LTCG = Full value of consideration received or accruing - (indexed cost of acquisition + indexed cost of improvement + cost of transfer)
Where, Indexed cost of acquisition =Cost of acquisition x CII of year of transfer /CII of year of acquisition
Indexed cost of improvement =Cost of improvement x CII of year of transfer /CII of year of improvement
CII = Cost Inflation Index (Please see chart given below)
Tax liability on LTCG to be taken at 20%.
If total income other than LTCG is less than zero slab,LTCG over the zero slab only attracts tax at 20%.
You can also use our Online Capital Gain Tax calculator
Complete Notification is Given Below.
Notification =60 dated 24.07.2015
SECTION 48, EXPLANATION (v) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - COMPUTATION OF - NOTIFIED COST INFLATION INDEX FOR FINANCIAL YEAR 2015-16
In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (42 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:—
2. In the said notification, in the Table, after serial number 34 and the entries relating thereto, the following serial number and entries shall be inserted, namely:—
|Sl. No.||Financial Year||Cost Inflation Index|
Cost inflation Index for Financial Year 1981-82 to 2015-16 is given below for your ready reference.