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 Year	Cost Inflation Index
1	2001-02	100
2	2002-03	105
3	2003-04	109
4	2004-05	113
5	2005-06	117
6	2006-07	122
7	2007-08	129
8	2008-09	137
9	2009-10	148
10	2010-10	167
11	2011-12	184
12	2012-13	200
13	2013-14	220
14	2014-15	240
15	2015-16	254
16	2016-17	264
17	2017-18	272
18	2018-19	280

Check Capital Gain Tax Rates Here

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.	CII	F.Y.	CII
1981-82	100	1999-00	389
1982-83	109	2000-01	406
1983-84	116	2001-02	426
1984-85	125	2002-03	447
1985-86	133	2003-04	463
1986-87	140	2004-05	480
1987-88	150	2005-06	497
1988-89	161	2006-07	519
1989-90	172	2007-08	551
1990-91	182	2008-09	582
1991-92	199	2009-10	632
1992-93	223	2010-11	711
1993-94	244	2011-12	785
1994-95	259	2012-13	852
1995-96	281	2013-14	939
1996-97	305	2014-15	1024
1997-98	331	2015-16	1081
1998-99	351	2016-17	1125

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 Consideration		18,00,000/-
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 gain		4,14,000/-