I-T Department Notifies Cost Inflation Index For FY24 To Calculate Long-Term Capital Gains
As per the notification dated April 10, 2023, the CII number for the current fiscal is 348. For the last financial year, the CII number was 331 and for the FY22 it was 317
The Income Tax (I-T) Department has notified the Cost Inflation Index (CII) for the current financial year beginning April 2023, for the calculation of long-term capital gains tax (LTCG) arising from the sale of immovable property, securities, and jewellery, reported PTI. As per the notification dated April 10, 2023, the CII number for the current fiscal is 348.
The CII is used by taxpayers to calculate gains from the sale of capital assets after adjusting inflation. Usually, the Central Board of Direct Taxes (CBDT) notifies CII in the month of June.
For the last financial year, the CII number was 331 and for the FY22 it was 317.
The indexed or inflation-adjusted cost of a long-term asset is determined using the CII figure in order to determine capital gains. Following the calculation of capital gains, the income tax due is determined. Taxpayers will need this CII number from FY24 when filing their income tax return (ITR) for the assessment year 2024–2025.
AMRG & Associates Senior Partner Rajat Mohan told PTI, "This year's cost of inflation index is notified 3 months earlier by the tax department as compared to last fiscal year. Taxpayers can now precisely and accurately compute tax on long-term gains in the first quarter of FY23-24 and pay the necessary advance tax."
Under the Income-tax Act of 1961, the Cost Inflation Index, or CII, is notified every year. The "indexed cost of acquisition" is a commonly used formula to determine capital gains when selling any type of capital asset.
In order to qualify as "long-term capital gains," an asset must be held for more than 36 months (24 months for real estate and unlisted shares, 12 months for listed securities). The CII is used to determine the inflation-adjusted purchasing price of assets in order to calculate taxable long-term capital gains (LTCG), as rising prices for products cause a decline in purchasing power over time.
Top Headlines
