The income tax department has notified the Cost Inflation Index for the current fiscal beginning April 2024, for calculating long-term capital gains arising from sale of immovable property, securities and jewellery.
- The Cost Inflation Index (CII) is used by taxpayers to compute gains arising out of sale of capital assets after adjusting inflation.
- The CII for financial year 2024-25, relevant to assessment year 2025-26, stood at 363, as per a notification of the Central Board of Direct Taxes (CBDT).
- The CII number for last fiscal was 348 and for 2022-23 financial year it was 331.
- An asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as ’long-term capital gains’.
- Since prices of goods increase over time resulting in a fall in the purchasing power, the CII is used to arrive at the inflation adjusted purchasing price of assets so as to compute taxable long-term capital gains (LTCG).
