What is Cost inflation index?

Cost inflation index for the purpose of computing the indexed cost of acquisition or indexed cost of improvement for the purpose of the income tax act, 1961

Cost inflation index for the financial year 2016-2017 (A.Y.2017-2018) has been notified as “1125” vide notification no.42/2016 dated 02.06.2016

What is Cost inflation index?

Cost inflation index for any year means such index as the Central government may having regard to 75% of the average rise in consumer price index for urban non manual employees for the immediately preceding previous year to such previous year, by the notification in the Official gazette, specify in this behalf.

The central government has notified the cost inflation index for the purpose of long term capital gain as follows:

• Notified vide notification no.42/2016 dated 02.06.2016