CBDT has notified the Cost Inflation Index(CII) for Financial Year 2014-15. Complete Notification is Given Below.
A person who is liable to pay tax on the capital gain due to sale of some capital asset can claim exemption as specified if he invests in buying or constructing a new property or agricultural land within a specified time. However if he wishes to invest but has not been able to find a suitable deal he can deposit the amount in a special account known as Capital Gains deposit Accounts scheme of a bank before the due date of filing his return of income. Due date for filing income tax return in respect of assessment year 2013-14 for non-audit cases is 31.07.2013
Strategy behind Dividend Stripping
Dividend stripping is a strategy to reduce the tax burden, by which an investor gets tax free dividend by investing in securities (including units), shortly before the record date and exiting after the record date at a lower price, thereby incurring a short-term capital loss. This short-term capital loss is compensated with the tax free dividend. Further the investor can set off such loss against capital gains – both short-term and long-term – as the law stands at present and can also carry forward the unabsorbed loss for set off in future years.
CBDT (Central Board of Direct Taxes) has notified the Cost Inflation Index (CII) for the Financial Year 2013-14 at 939 vide Notification no.40/2013[F.NO.142/7/2013-TPL]/SO 1464(E), Dated June 6, 2013.
Now Indexation of Cost of Acquisition and Cost of Improvement in Long Term Capital Gain Calculation is to be done by taking 939 as Index for Financial year 2013-14.
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Tarun Kumar Gupta
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