Anil Rego | Answer |Ask -Follow
Financial Planner - Answered on Mar 18, 2021
How to calculate indexation benefits in ITR?
You can do this by multiplying the Purchase Consideration of the Asset by the Cost Inflation Index(CII) in the year of sale and divide the CII for the year of purchase.
The CII is published by the income tax department and you can do a web search and you will get the same easily.
Eg. If you bought an asset for Rs 40 lakh in a year when the CII was 12o and sold it for Rs 50 lakh in a year when the CII was 132, your indexed cost of acquisition will be = 40*132/120 = 44.
Ie. Your indexed cost of acquisition is Rs 44 lakh.
The difference between the sale value and the indexed cost of acquisition is the capital gains.
Ie. 50-44= Rs 6 lakh is your capital gain.
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