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Cost Inflation Index Table From 1981-82 To 2015-16 For Capital Gains Tax


Cost Inflation Index Table is very important for the purpose of payment of capital gains tax and is released by the Income Tax Department every year.

Cost Inflation Index Table From 1981-82 To 2015-16 For Capital Gains Tax
The table helps you to calculate capital gains tax on property sold. Let's understand the importance of this table with precise calculation.

Cost Inflation Index Table From 1989 To 2015-16 For Calculation Capital Gains Tax


2015-16 1081
2014-15 1024
2013-14 939
2012-13 852
2011-12 785
2010-2011 711
2009-2010 632
2008-2009 582
2007-2008 551
2006-2007 519
2005-2006 497
2004-2005 480
2003-2004 463
2002-2003 447
2001-2002 426
2000-2001 406
1999-2000 389
1998-1999 351
1997-1998 331
1996-1997 305
1995-1996 281
1994-1995 259
1993-1994 244
1992-1993 223
1991-1992 199
1990-1991 182
1989-1990 172
1988-1989 161
1987-1988 150
1986-1987 140
1985-1986 133
1984-1985 125
1983-1984 116
1982-1983 109
1981-1982 100

A look at the table above and you would realize that inflation has eaten away into the value of money. If you bought a property for Rs 1 lakh in 1982-1983 and sold the same for Rs 25 lakh in 2015-16, why should you pay capital gains tax on the entire profit of Rs 24 lakh, as there has been an inflation.

Hence, the Income Tax Department comes up with a cost inflation index, which helps calculate capital gains with the help of the index and pay tax accordingly.

How to calculate capital gains with cost inflation index?

Let us say that you purchased an apartment for Rs 20 lakhs in financial year 1985-86 and sold the same for Rs 75 lakhs in 2015-16. Then you do not have to pay capital tax on the profit i.e. Rs 75 lakhs-Rs 25 lakhs. But, your capital gains tax would be calculated as follows:

Actual Cost Of Purchase x Cost inflation Index On year of Sale/Cost Inflation Index On Year Of Purchase.

So, capital gains would be Rs 20 lakhs x 1081/133. This would be far higher than the value of sale, so you would not have to pay capital gains.

You need to calculate your tax based on the above formula before paying a tax. In case you do not want to pay the capital gains tax you can invest in another house or in capital gains tax saving bonds. Read more on how to save capital gains tax

Story first published: Tuesday, September 22, 2015, 10:34 [IST]
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