Income Tax: Cost Inflation Index For FY-2014-2015 Notified

CBDT has notified the Cost Inflation Index(CII) for Financial Year 2014-15. Complete Notification is Given Below.

SECTION 48, EXPLANATION (v) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - COMPUTATION OF - NOTIFIED COST INFLATION INDEX FOR FINANCIAL YEAR 2014-15

NOTIFICATION NO. 31/2014 [F. NO. 142/3/2014-TPL], DATED 11-6-2014
In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (42 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:--2. In the said notification, in the Table, after serial number 33 and the entries relating thereto, the following serial number and entries shall be inserted, namely:--
Sl. No.             Financial Year                  Cost Inflation Index
(1)                         (2)                                       (3)
"34                    2014-15                               1024"

Cost Inflation is required to calculate Long term capital gain under Income Tax Act. Long Term Capital Gains is computed as below : -
LTCG = Full value of consideration received or accruing - (indexed cost of acquisition + indexed cost ofimprovement + cost of transfer)
Where, Indexed cost of acquisition =Cost of acquisition x CII of year of transfer /CII of year of acquisition
Indexed cost of improvement =Cost of improvement x CII of year of transfer /CII of year of improvement
CII = Cost Inflation Index (Please see chart given below)
Tax liability on LTCG to be taken at 20%.
If total income other than LTCG is less than zero slab,LTCG over the zero slab only attracts tax at 20%.

Cost inflation Index for Financial Year 1981-82 to 2014-15 is given below for your ready reference.