New Delhi: The income tax department has notified the cost inflation index for current fiscal beginning April 2021 for calculating long-term capital gains arising from sale of immovable property, securities and jewellery. The cost inflation index (CII) is used by taxpayer to compute gains arising out of sale of capital assets after adjusting inflation.
The Central Board of Direct Taxes (CBDT) on June 15 notified the cost inflation index for the current fiscal (2021-22).
"The Cost Inflation Index for FY 2021-22 relevant to AY 2022-23 & subsequent years is 317," the Central Board of Direct Taxes said while notifying the CII number. Tax experts said this inflation index of 317 seems reasonable for the computation of capital gains in the case of sale of jewellery and real estate properties.
"Covid pandemic led to the economy's contraction, high revenue deficit, widening fiscal deficit, even then overall inflationary graph never spiked like what it used to be before 2013. All this led to a very nominal increase of 16 points in the cost of inflation index over the last financial year, and the inflationary impact of Covid could not be seen on the same," AMRG & Associates Senior Partner Rajat Mohan said.
This inflation index of 317 seems "reasonable for the computation of capital gains in the case of sale of Jewellery and real estate properties during FY 2021-22, as the prices of both have remained intact even during the Covid times, Mohan added.
This CII number would help taxpayers to compute the long-term capital gains on which they are liable to pay income tax.