Cost Inflation Index FY 2021-22

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 Funds 2017.

This CII quantity is necessary as it’s used to reach on the inflation adjusted buying worth of property (listed price of acquisition) which have been bought or deliberate to be bought in FY 2021-22.

The listed price of acquisition is used within the calculation of Lengthy-term capital features (LTCG) or Lengthy Time period Capital Losses (LTCL).

Kindly notice that CII is used to calculate inflation-adjusted price just for these property the place inflation-adjusted (indexation profit) is allowed. For instance, within the circumstances of debt mutual funds, real-estate property, gold and many others.,

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 Earnings Tax Division. You may take values from the desk to compute the listed or inflation-adjusted price of acquisition.  

Monetary 12 months Evaluation 12 months 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
Price of Inflation Index Desk for FY 2021-22 | AY 2022-23

The right way to Calculate the Listed price of buy or listed price of Acquisition (ICoA)?

The listed price is calculated with the assistance of a desk of price inflation index as given above.

Divide the 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 = Unique price of acquisition * (CII of the 12 months of sale/CII of 12 months of buy)

Let’s say you will 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 worth of Rs 3,00,000 ( 20,000 models @ Rs 15 every).

Therefore, while you bought your investments, the worth of your investments was Rs 3,00,000. Your funding made capital features price Rs 1,00,000. Nevertheless, you needn’t pay tax on this complete quantity of Rs 1,00,000.

All you’ll want to do is apply the system.

  • 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 may imply that your listed price worth of acquisition could be –> (2,00,000 * 317/240) = Rs 2,64,167.

As once more, your Long run capital features 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 is able to once more, significantly scale 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.

CII Index value 317 Cost Inflation index FY 2021-22 AY 2022-23 Notification
Price Inflation index FY 2021-22 / AY 2022-23 | Notification

Proceed studying:

  1. What’s Detrimental Actual Curiosity Fee? | How Can Curiosity Charges Be Detrimental?
  2. What’s Indexation of Mutual Funds and why is it necessary for you?
  3. Listing of all Fashionable Funding Choices in India – Options & Snapshot
  4. The right way to save Capital Positive factors Tax on Sale of Land / Home Property?

(Publish first printed on 27-June-2021)

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