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Price of Inflation Index for FY 2023-24 AY 2024-25


What’s the CII or value of inflation Index for FY 2023-24? CBDT notified the Price of Inflation Index for FY 2023-24 AY 2024-25 for Capital Achieve on tenth April 2023. Chances are you’ll remember that the bottom yr was modified from the sooner FY 1981-82 to FY 2001-02.

Change within the Base yr for Capital Achieve Indexation

In Price range 2017, the Authorities proposed to alter the bottom yr to calculate the indexation profit from 1981 to 2001. Do do not forget that the change within the base yr is throughout all asset lessons however the affect would differ throughout property that get pleasure from indexation advantages on long-term capital beneficial properties—actual property, unlisted shares, gold, and bond funds. As much as thirty first March 2017, the capital acquire was calculated with 1981 as the bottom yr. Which means the acquisition value of an asset purchased earlier than 1 April 1981 could possibly be calculated on the idea of the honest market worth of 1981. Nonetheless, from 1st Apr 2017, the acquisition value will probably be calculated based mostly on the honest market worth of 2001. Accordingly, capital beneficial properties on property acquired earlier than 1 April 2001 may even be calculated utilizing honest market worth as of 2001.

What’s the Price of Inflation Index (CII)?

It is a measure of inflation that’s used for computing Lengthy Time period Capital Beneficial properties (LTCG) on the sale of capital property as per IT Part.48.

It’s introduced for every Monetary 12 months however not based mostly on Evaluation 12 months. Therefore, the relevant price of CII will probably be for that exact monetary yr.

To reach at a capital acquire, it is vitally a lot essential to calculate the LTCG. For this objective Price of Inflation Index is a should.

Take an instance of how the listed value of acquisition will probably be calculated utilizing Price of Inflation Index or CII.

The components is as beneath.

Listed Price of Acquisition=(Price of Acquisition/Price of Inflation Index (CII) for the yr by which the asset was first held by the assessee OR FY 2001-02, whichever is later)* Price of the Inflation Index (CII) for the yr by which the asset was offered or transferred.

Allow us to assume that you just bought the property in FY 2005-06 at Rs.50 lakh and offered the identical in FY 2017-18 at Rs.1.5 Cr. Now the listed value of acquisition will probably be as per the above components i.e.

Listed Price of Acquisition=(Rs.50 lakh/117)*272=Rs.1,16,23,931. So the Lengthy Time period Capital Achieve=Promoting Worth-Listed Price of shopping for property=Rs.33,76,069.

(Notice-As per the beneath Price of Inflation Index (CII), the CII price for FY 2017-18 is 272 and for FY 2005-06, it’s 117).

Nonetheless, if you don’t contemplate the listed value, then in plain the acquire could also be stated as Rs.1 Cr lakh (Rs.1.5 Cr-Rs.50 Lakh). However within the case of taxation, the LTCG on capital property will probably be after adjusting the price of shopping for to inflation or the Price of Inflation Index (CII).

Price of Inflation Index for FY 2023-24

Allow us to now look into the price of inflation index for FY 2023-24 and in addition what was the historic value of inflation index from FY 2001-02.

Cost of Inflation Index for FY 2023-24 AY 2024-25 for Capital Gain with base year 2001-02

Now allow us to see how this value of inflation index is growing yr on yr from the bottom yr to the newest FY 2023-24.

Yearly increment in Cost of Inflation Index from FY 2001-02 to FY 2023-24

You seen that from final yr to this yr, the increment is round 5.1%.

Hope this data will assist you to in arriving at your capital acquire tax.

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