CII INdex: Cost inflation index for FY 2022-23 used for LTCG calculation notified

[ad_1]

The Central Board of Direct Taxes (CBDT) notified the fee inflation index (CII) for FY 2022-23 through a notification dated June 14, 2022. The Cost Inflation Index for FY 2022-23 related to AY 2023-24 is 331.

For the earlier yr, i.e., FY 2021-22, CII was notified as 317.

The place is the fee inflation index used?
The CII is used to compute an asset’s inflation-adjusted price value. Lengthy-term capital good points or losses are then calculated utilizing the inflation-adjusted value. The CII determine is used to compute the inflation adjusted worth of belongings together with land, buildings, homes, gold jewelry, debt mutual funds, and so forth. It can’t, nevertheless, be utilised for good points on fairness shares and equities mutual funds which might be taxed at a fee of 10% with none indexation profit.

This CII quantity will help you establish the long-term capital good points on which you’re required to pay taxes while you file your earnings tax returns (ITR) subsequent yr.

This notification will take impact on April 1, 2023 and can apply to the Assessment Year 2023-24 and future years.

What’s CII?

It’s an index that’s used to calculate the inflation-adjusted rise within the worth of an asset. Relating to the fee inflation index, there are two components to remember.

This quantity shall be used to calculate inflation-adjusted price for under these belongings that permit for inflation-adjusted (indexation profit). Because of this, the CII worth can’t be used to calculate LTCG/LTCL on fairness mutual funds as a result of any sum above Rs 1 lakh every fiscal yr is taxed at a flat fee of 10% with out the benefit of indexation.

How it’s calculated

The components to calculate inflation-adjusted price value is: (CII of the yr of sale/CII for the yr of buy) * Precise price value.

The federal government declared in Funds 2017 that the bottom yr could be modified from 1981 to 2001 attributable to challenges in acquiring acceptable info by taxpayers. Within the case of an asset bought previous to April 1, 2001, the price of the asset is thought to be the truthful market worth on April 1, 2001.

[ad_2]

Source link

Get in touch

CII INdex: Cost inflation index for FY 2022-23 used for LTCG calculation notified

What’s CII?

How it’s calculated

Get Access To Free Mt4 Indicators & Much More