Cost Inflation Index for Financial Year 2014-15 is 1024 as notified by CBDT
Cost Inflation Index helps in determining the true value gains according to inflation. This reduces inflationary gains, which reduces the long-term capital gains resulting in income tax payout for a taxpayer.
Last year, the index was ‘939’, and this year it is ‘1024’. This means that Cost Inflation index increased by 9.05% for 2014-15. Last year it increased by 10.2%.
Currently, Long-term Capital Gain is computed after adjusting for inflation under the income-tax law of India. Both cost of acquisition as well as the cost of improvement is adjusted for inflation between the date of purchase and date of sale (through the cost inflation index) before the long-term capital gain is ascertained.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
New Delhi, the 11th June, 2014
S.O. 1498(E)- 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 33 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-
|Sl. No||Financial Year||Cost Inflation Index|
[Notification No. 31/2014/F.No.142/3/2014-TPL]
|Financial Year||Cost Inflation index(CII)|
Note:- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(ii), vide number S.O.709(E), dated the 20th August, 1998 and lastly amended vide number S.O.1464 (E), dated the 6th June, 2013.