Indexed cost of acquisition adjusts purchase cost for inflation using prescribed CII ratio to compute capital gains tax base. Clause 52 sets the indexed cost formulas for capital gain computation: indexed cost = A x B/C. For acquisition, A is the cost of acquisition, B is the Cost Inflation Index for the financial year of transfer, and C is the Cost Inflation Index for the financial year of acquisition or for the financial year beginning on the first day of April 2000, whichever is later. For improvement, A is the cost of improvement and C is the Cost Inflation Index for the financial year in which the improvement occurred or that same reference financial year.
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Indexed cost of acquisition adjusts purchase cost for inflation using prescribed CII ratio to compute capital gains tax base.
Clause 52 sets the indexed cost formulas for capital gain computation: indexed cost = A x B/C. For acquisition, A is the cost of acquisition, B is the Cost Inflation Index for the financial year of transfer, and C is the Cost Inflation Index for the financial year of acquisition or for the financial year beginning on the first day of April 2000, whichever is later. For improvement, A is the cost of improvement and C is the Cost Inflation Index for the financial year in which the improvement occurred or that same reference financial year.
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