Indexation for Property Purchase: 1996 vs 2015

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This discussion clarifies the indexation date for a commercial property purchased in 1996 but with a conveyance deed finalised in 2015. The consensus is that for indexation purposes, the purchase year should be considered 2015, making the subsequent sale in 2019 a long-term capital gain. The indexed purchase value is calculated using the Cost Inflation Index for 2015 as the base year.

sanjay

sanjay (Querist)
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11 March 2020 Sir Hello
I want to take one advise from experts. Commercial Shop in 1996 but the conveyance deed done in 2015. My question is: Can I take the purchase date as 2015 for indexation purpose? It is sold in 2019. Is it treated as long Term or Short Term. Pl reply asp as I have to deposit advance tax.
Pl advise.
Regards.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 March 2020 Purchase year for indexation is 2015. Gain is long term per corollary to section 2(42A).

sanjay

sanjay (Querist)
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26 March 2020 Sir
What will be the purchase value if I take year of indexation 2015. Is it the value of 1996 or what? Pl advise.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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25 May 2020 You have to calculate the indexed price of 2019 as your base year will be 2015

NOTIFIED COST INFLATION INDEX UNDER SECTION 48, EXPLANATION (V)

As per Notification No. So 3266(E) [No. 63/2019 (F.No. 370142/11/2019-TPL)], Dated 12-9-2019, following table should be used for the Cost Inflation Index :-

Sl. No. Financial Year Cost Inflation Index
(1) (2) (3)
1 2001-02 100
2 2002-03 105
3 2003-04 109
4 2004-05 113
5 2005-06 117
6 2006-07 122
7 2007-08 129
8 2008-09 137
9 2009-10 148
10 2010-11 167
11 2011-12 184
12 2012-13 200
13 2013-14 220
14 2014-15 240
15 2015-16 254
16 2016-17 264
17 2017-18 272
18 2018-19 280
19 2019-20 289

[As amended by Finance Act, 2020]

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