The Central Board of Direct Taxes (CBDT) has notified the cost inflation index (CII) number for the current financial year, 2023-24. The CII number for the current fiscal year is 348.
About Cost Inflation Index (CII)
- The CII number is used to calculate the indexed or inflation adjusted cost on a long-term asset in order to calculate the capital gains. In other words, the CII number is used to calculate the long-term capital gains when a house, land or building is sold by an individual.
- Once the capital gains are calculated, then income tax payable on such gains is calculated.
- The cost inflation index number is used to adjust the purchase price of assets on the basis of inflation.
- The CII number helps an individual to ascertain the inflation-adjusted current price of an asset.
- This in turn helps in calculating capital gains from the sale of those assets after taking inflation into account.
- Till FY 2022-23, the CII number was used to calculate the long-term capital gains from non-equity mutual fund schemes. These are debt mutual fund schemes, international equity mutual fund schemes and gold mutual fund schemes, among others. From FY 2023-24, the indexation benefit on long-term capital gains from non-equity mutual fund schemes has been removed.
- From the current financial year, the CII number cannot be used for debt mutual fund schemes and international equity mutual fund schemes, among others.
