Owner
0 Points
Joined June 2011
| Financial Year(AY) |
Cost Inflation Index |
| 2001-02 (Base year) |
100 |
The base year has an index value of 100. Years after the base year are indexed to measure inflation. For assets bought before the base year, their purchase price can be taken as either their Fair Market Value (FMV) or actual cost on the base year's first day. Indexation benefits are then applied to this price for tax purposes. FMV is determined by a registered valuer's report.
Formula
Indexed Cost of Asset Acquisition = (CII for sale year x Cost of acquisition) / (CII for the year of asset purchase or 2001-02, whichever is later)
Indexed Cost of Asset Improvement = (CII for sale year x Cost of improvement) / CII for year of improvement