Mode of computation of capital gains: updated indexation, tightened deductible items, and rules for business trusts and non-residents.
Clause 72 updates the mode of computation of capital gains by retaining deductions for expenditure and cost of acquisition or improvement while specifying a Cost Inflation Index tied to the Consumer Price Index (urban) for indexation. It expressly disallows certain interest payments and securities transaction tax, sets out reduction rules for cost of acquisition involving business trusts and specified entities, and provides detailed computation rules for non-residents addressing foreign currency and rupee appreciation, alongside definitions for indexed cost concepts.