The price of inflation index (CII) for the monetary 12 months 2021-22 has been notified by the Ministry of Finance. The ministry has set the Price Inflation Index FY 202-22 as 317. For the earlier FY 2020-21, CII worth was 301.
The speed of inflation for indexation functions is specified by the Indian Authorities for each monetary 12 months.
The bottom 12 months is taken into account as 2001-02.
The bottom 12 months was shifted from 1981 to 2001 in Finances 2017.
This CII quantity is vital as it’s used to reach on the inflation adjusted buying worth of belongings (listed value of acquisition) which have been bought or deliberate to be bought in FY 2021-22.
The listed value of acquisition is used within the calculation of Lengthy-term capital beneficial properties (LTCG) or Lengthy Time period Capital Losses (LTCL).
Kindly observe that CII is used to calculate inflation-adjusted value just for these belongings the place inflation-adjusted (indexation profit) is allowed. For instance, within the instances of debt mutual funds, real-estate property, gold and so forth.,
The CII worth can’t be used to reach at LTCG/LTCL on fairness mutual funds. Index profit is not allowed in case of bonds or debentures besides capital indexation bonds or sovereign gold bonds issued by the RBI.
Newest Price Inflation Index FY 2021-22 | CII Chart AY 2022-23
Under is the desk of Price Inflation Index numbers, as stipulated by the Revenue Tax Division. You possibly can take values from the desk to compute the listed or inflation-adjusted value of acquisition.
| Monetary Yr | Evaluation Yr | Price of Inflation Index (CII) |
|---|---|---|
| 2001-02 (Base 12 months) | 2002-03 | 100 |
| 2002-03 | 2003-04 | 105 |
| 2003-04 | 2004-05 | 109 |
| 2004-05 | 2005-06 | 113 |
| 2005-06 | 2006-07 | 117 |
| 2006-07 | 2007-08 | 122 |
| 2007-08 | 2008-09 | 129 |
| 2008-09 | 2009-10 | 137 |
| 2009-10 | 2010-11 | 148 |
| 2010-11 | 2011-12 | 167 |
| 2011-12 | 2012-13 | 184 |
| 2012-13 | 2013-14 | 200 |
| 2013-14 | 2014-15 | 220 |
| 2014-15 | 2015-16 | 240 |
| 2015-16 | 2016-17 | 254 |
| 2016-17 | 2017-18 | 264 |
| 2017-18 | 2018-19 | 272 |
| 2018-19 | 2019-20 | 280 |
| 2019-20 | 2020-21 | 289 |
| 2020-21 | 2021-22 | 301 |
| 2021-22 | 2022-23 | 317 |
Find out how to Calculate the Listed value of buy or listed value of Acquisition (ICoA)?
The listed value is calculated with the assistance of a desk of value inflation index as given above.
Divide the associated fee at which you bought the Property/Funding by the index as on the date of the acquisition. Multiply this by the index as on the date of sale.
ICoA = Authentic value of acquisition * (CII of the 12 months of sale/CII of 12 months of buy)
Let’s say you might have invested in a debt fund in August 2014. Your funding quantity was Rs 2,00,000 (20,000 models @ Rs 10 every). Seven years later, you redeemed your investments in June 2021, at a price of Rs 3,00,000 ( 20,000 models @ Rs 15 every).
Therefore, once you bought your investments, the worth of your investments was Rs 3,00,000. Your funding made capital beneficial properties price Rs 1,00,000. Nevertheless, you needn’t pay tax on this whole quantity of Rs 1,00,000.
All you could do is apply the method.
- Price of acquisition is Rs 2 lakh.
- CII quantity for buy 12 months (2014-15) was 240.
- CII throughout sale 12 months (FY 2021-22) is 317.
This could imply that your listed value worth of acquisition could be –> (2,00,000 * 317/240) = Rs 2,64,167.
As once more, your Long run capital beneficial properties would come all the way down to Rs. 35,833 (Rs 3,00,000- Rs.2,64,167), you may be taxed 20% of this quantity (as in comparison with Rs 1,00,000 with out indexation) which can once more, drastically cut back your tax obligations.
Thus, with Indexation, you’ll be able to get pleasure from the advantages of your personal investments with out shedding an extreme quantity of taxes.
CII Index Worth for FY 2021-22 / AY 2022-23 | Notification
Under is the notification issued by the Ministry of Finance on Price Inflation Index for FY 2021-22.
Proceed studying:
- What’s Damaging Actual Curiosity Fee? | How Can Curiosity Charges Be Damaging?
- What’s Indexation of Mutual Funds and why is it vital for you?
- Listing of all Common Funding Choices in India – Options & Snapshot
- Find out how to save Capital Positive aspects Tax on Sale of Land / Home Property?
(Publish first revealed on 27-June-2021)