The price of inflation index (CII) for the monetary yr 2023-24 has been notified by the Ministry of Finance. The ministry has set the Price Inflation Index FY 2023-24 as 348. For the earlier FY 2022-23, CII worth was 331.
The speed of inflation for indexation functions is specified by the Indian Authorities for each monetary yr.
The bottom yr 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 belongings (listed value of acquisition) which have been offered or deliberate to be offered in FY 2023-24.
The listed value of acquisition is used within the calculation of Lengthy-term capital beneficial properties (LTCG) or Lengthy Time period Capital Losses (LTCL).
Kindly be aware that CII is used to calculate inflation-adjusted value just for these belongings the place inflation-adjusted (indexation profit) is allowed. For instance, within the instances of debt mutual funds, real-estate property, gold and so forth.,
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 2023-24 | CII Chart AY 2024-25
Beneath is the desk of Price Inflation Index numbers, as stipulated by the Revenue Tax Division. You may take values from the desk to compute the listed or inflation-adjusted value of acquisition.
| Monetary 12 months | Evaluation 12 months | Price of Inflation Index (CII) |
|---|---|---|
| 2001-02 (Base yr) | 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 |
| 2023-24 | 331 | |
| 2023-24 | 2024-25 | 348 |
How one can Calculate the Listed value of buy or listed value of Acquisition (ICoA)?
The listed value is calculated with the assistance of a desk of value inflation index as given above.
Divide the price 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 = Authentic value of acquisition * (CII of the yr of sale/CII of yr of buy)
Let’s say you could have invested in a non-equity oriented fund in August 2014. Your funding quantity was Rs 2,00,000 (20,000 items @ Rs 10 every). 9 years later, you redeemed your investments in June 2023, at a price of Rs 3,00,000 (20,000 items @ Rs 15 every).
Therefore, if you offered your investments, the worth of your investments was Rs 3,00,000. Your funding made capital beneficial properties price Rs 1,00,000. Nonetheless, you needn’t pay tax on this whole quantity of Rs 1,00,000.
All you must do is apply the method.
- Price of acquisition is Rs 2 lakh.
- CII quantity for buy yr (2014-15) was 240.
- CII throughout sale yr (FY 2023-24) is 348.
This is able to imply that your listed value worth of acquisition could be –> (2,00,000 * 348/240) = Rs 2,90,000.
As once more, your Long run capital beneficial properties would come right down to Rs. 10,000 (Rs 3,00,000- Rs.2,90,000), you can be taxed 20% of this quantity (as in comparison with Rs 1,00,000 with out indexation) which is able to once more, tremendously scale back your tax obligations.
Thus, with Indexation, you possibly can take pleasure in the advantages of your personal investments with out shedding an extreme quantity of taxes.
As per Funds 2023, no indexation profit is obtainable whereas calculating long-term capital beneficial properties on Specified Mutual Fund (i.e. a mutual fund which invests lower than 35% of its proceeds within the fairness shares of home corporations). We are able to think about these specified funds as pure Debt oriented funds and any beneficial properties (STCG or LTCG) on these are actually taxed as per revenue tax slab price. This new rule is relevant for investments made on or after April 1, 2023 solely. Learn – Mutual Funds Taxation Guidelines FY 2023-24 (AY 2024-25) | Capital Positive aspects Tax Charges Chart
CII Index Worth for FY 2023-24 / AY 2024-25 | Notification
Beneath is the notification issued by the Ministry of Finance on Price Inflation Index for FY 2023-24.
Instructed Reads :
(Submit first printed on : 24-July-2023)
