Cost Inflation Index (CII) for FY 2018-19/ AY 2019-20 Notified by CBDT at 280

Cost Inflation Index (CII) for FY 2018-19/ AY 2019-20 Notified by CBDT at 280 (Base Year 2001-02)

CBDT has notified new Cost Inflation Index (CII) for Financial Year (FY) 2018-19/ Assessment Year (AY) 2019-20 at 280, with new Base Year 2001-02 (cost inflation index=100) in line with the amendments made in the Finance Act, 2017, as under:

Cost Inflation Index at 280 for FY 2018-19/ AY 2019-20: CBDT Notification No. 26/2018 dt. 13 June 2018

S.O. 2413(E).- In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, vide number S.O. 1790(E), dated the 5th June, 2017, namely:-

2. In the said notification, in the Table, after serial number 17, the following serial number and entries relating thereto, shall be inserted, namely:-

SI. No. Financial Year Cost Inflation Index
(1) (2) (3)
18 2018-19 280

2. This notification shall come into force with effect from 1st day of April, 2019 and shall accordingly apply to the assessment year 2019-20 and subsequent years.

Note:- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 1790(E), dated the 5th June, 2017.

New Cost Inflation Index (CII) for FY 2017-18/ AY 2018-19 Notified by CBDT at 272 (Base Year 2001-02)

Earlier, the CBDT has notified the Cost Inflation Index (CII) uptoFinancial Year (FY) 2017-18/ Assessment Year (AY) 2018-19 (272 for FY 2017-18), with new Base Year 2001-02 (cost inflation index=100) in line with the amendments made by the Finance Act, 2017, as under:

Cost Inflation Index from FY 2017-18/ AY 2018-19: CBDT Notification No. 44/2017 dt. 5 June 2017

S.O. 1790(E).- In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Cost Inflation Index as mentioned in column (3) of the Table for the Financial Years mentioned in the corresponding entry in column (2) of the said Table, namely:—

SI. No. Financial Year Cost Inflation Index
(1) (2) (3)
1 2001-02 100
2 2002-03 105
3 2003-04 109
4 2004-05 113
5 2005-06 117
6 2006-07 122
7 2007-08 129
8 2008-09 137
9 2009-10 148
10 2010-11 167
11 2011-12 184
12 2012-13 200
13 2013-14 220
14 2014-15 240
15 2015-16 254
16 2016-17 264
17 2017-18 272

2. This notification shall come into force with effect from 1st day of April, 2018 and shall accordingly apply to the assessment year 2018-19 and subsequent years.

Relevance of Cost Inflation Index?

In the case of transfer of short term capital asset, the amount of capital gains can be arrived at by deducting the cost of acquisition/ improvement from the sale consideration. However, in the case of transfer of long term capital asset, capital gains are determined by deducting indexed cost of acquisition/ improvement from the sale consideration.

Cost Inflation Index basically means the index notified by the Central Govt. with reference to average rise in the consumer price index, during the year immediately preceding the relevant previous year. However, indexed cost of acquisition is arrived at by multiplying the cost of acquisition with the change in cost inflation index since the year of acquisition or 1 April, 2001 whichever is later.

New Cost Inflation Index from FY 2017-18/ AY 2018-19

The Finance Act 2017 has amended the provisions relating to indexation for the purpose of determining long term capital gains, in line with proposals of Budget 2017. In short, the ‘Base Year’ has been shifted from FY 1981-82 to FY 2001-02. In respect of assets acquired prior to 1 Apr. 2001, the assessee now has the option to use FMV/ Indexed Cost of Acquisition for arriving at the figure of long term capital gains. It’s likely that investors in property will stand to gain in most of the cases with shifting of the base year for the purpose of indexation.

One Response

  1. Sakthi Oct 7, 2017

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