How is property indexation calculated in India?
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How is property indexation calculated in India?
Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost. For example, if a property purchased in 1991-92 for Rs 20 lakh were to be sold in A.Y. 2009 -10 for Rs 80 lakh, indexed cost = (582/199) x 20 = Rs 58.49 lakh.
What is the indexation rate for FY 2020-21?
301
The cost inflation index for FY 2020-21 is 301. Check for other financial year’s CII Value.
How do you calculate capital gains tax on indexation?
Long-term Capital Gains Tax: Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition. Indexed cost of improvement = cost of improvement x cost inflation index of the year of transfer/cost inflation index of the year of improvement.
What is the indexation rate for FY 2022 23?
331
The CBDT has notified ‘331’ as CII for the Financial Year 2022-23. CII of 331 shall be used to compute long-term capital gains or losses on the capital assets which have been or are planned to be sold during the Financial Year 2022-23. The CII for the last financial year, i.e., the financial year 2021-22 was 317.
How do you calculate FMV 2001?
For example, assuming prices have increased year on year at 10%, the fair market value in FY 2001-02 would be 5 lakh x (1+10%)^13 ~ 17 Lakh. Now the CII in FY 2001-02 is 426. So the indexed cost of acquisition is 17 lakh x (1159/426) ~ 47 lakh. This is higher than the pre-budget calculation by about 11 lakh.
What if property is purchased before 2001?
The cost of acquisition of an asset acquired before 1 April 2001 shall be allowed to be taken as FMV as on 1st April, 2001 or the actual cost as chosen by the taxpayer. The cost of improvement shall include only those capital expenses which are incurred after 1 April 2001.
How do you calculate FMV of property in 2001?
The post-budget rule is to use the fair market value on April 2001 as the purchase price. The property was purchased for Rs. 5 Lakh in FY 1988-89. To determine the fair market value in FY 2001-02, one will have to get the sale record from registration office or consult an approved valuer.
How do you calculate FMV of property as on 1.4 2001?
There is no fixed formula to calculate FMV of a property….Registered Valuer to determine FMV or Fair Market Value of Property
- for first the Rs5 lakh of asset value, fee would be 0.50% of the value.
- For next Rs10 lakh, it would be 0.20%,
- for next Rs40 lakh 0.10% and 0.05% of the value thereafter.
What is annual indexation?
Annual indexation rate is equal to the average annual index of gross domestic product (GDP) at current prices over last 5 years preceding the date of indexation. Related terms: Gross domestic product.
What is indexation in capital gain India?
Indexation is used to adjust the purchase price of an investment to reflect the effect of inflation on it. A higher purchase price means lesser profits, which effectively means a lower tax. With the help of indexation, you will be able to lower your long-term capital gains, which brings down your taxable income.
What is the indexation rate?
Indexation maintains the real value of the loan by adjusting it in line with changes in the cost of living as measured by the consumer price index (CPI). The indexation figure is calculated each year after the March CPI is released.
How do you calculate FMV of property 2001?
How indexation is done?
Indexation is done through a mechanism using a Price Index which is adjusted for inflation. The Price Index adjusts for inflation at the time of purchase of an asset as well as at the time of its sale. It is a well-known fact that inflation erodes an asset’s value over a period of time.
