Cost inflation index for fy 2011-12

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anckoora (Querist)

03 December 2011 Dear Sir,

Please give me following informations :

(1)Provide me Cost Inflation Index for FY 2011-12 to count Long Term Capital Gain Tax.

(2) On 24.12.2010, I invested 50 lacs for 369 days in Reliance's Fixed Maturity Plan (FMP) @ 9.60% int. p.a. Now, it will mature on 26.12.2012. I will receive interest of Rs.485000/- (approx). I am in 30% Tax Slab. Now, Should I go for 10% LTCG on this Income OR Cost Inflation Index ? Which will save my more tax ? PL. GIVE ME CALCULATION OF LTCG IN BOTH THE CASES.

Thanks in advance.
anckoora

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

03 December 2011 Cost inflation index for fin. yr.2011-12 is 785 vide CBDT Notification 35/2011 dated 23/06/2011.

anckoora

anckoora (Querist)

03 December 2011 Dear Sir,

thanks for reply, but,

please answer my point no. 2

regards

anckoora

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

04 December 2011 In my view, the interest received by you will be taxable.
.

You can not apply Section 112A proviso as the fund is a debt oriented fund.

You can apply 10% LTCG rate only on equity oriented mutual funds.
.

This may be of the nature of bond or debenture and by the virtue of third proviso to Section 48 , indexation is not allowed on such securities.

However, You may refer the Plan Details in the brochures and if indexation is permitted tax rate applicable will be 20% on such LTCG.

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