CBDT notifies Cost Inflation Index (CII) for FY 2023-24 at 348, as against CII of 331 for the preceding FY 2022-23. The CII is used for calculating ‘long term capital gains (LTCG)’ under Income Tax. CBDT announces fresh CII each year using the base year 2001-02 as equal to 100. The Cost Inflation Index (CII) is used to estimate the increase in the prices of goods and assets year-by-year due to inflation.
Notably, the Finance Act 2017 has modified the provisions relating to the ‘cost inflation index’ or the indexation for calculating long-term capital gains (LTCG). Past provisions have been amended by replacing the old base financial year 1981-82 to new base financial year 2001-02. The income tax assessees have the option of calculating LTCG using Fair Market Value (FMV)/Indexed Cost of acquisition in respect of assets purchased prior to April 1, 2001.
CII of 23 years under Income Tax
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