The Cost Inflation Index is calculated to match the prices to the inflation rate. FMV is based on the valuation report of a registered valuer. Indexation benefit is applied to the purchase price so calculated. For any capital asset purchased before the base year of the cost inflation index, taxpayers can take the purchase price higher of the “actual cost or Fair Market Value (FMV) as on the 1st day of the base year. The index of all other years is compared to the base year to see the increase in inflation percentage. The base year is the first year of the cost inflation index and has an index value of 100. What is the concept of the base year in Cost Inflation Index? ![]() ![]() To benefit the taxpayers, the cost inflation index benefit is applied to the long-term capital assets, due to which purchase cost increases, resulting in lesser profits and lesser taxes. The cost inflation index is applied to the long-term capital assets, due to which purchase cost increases, resulting in lesser profits and lesser taxes to benefit taxpayers. When these assets are sold, the profit amount remains high due to the higher sale price as compared to the purchase price. Despite increasing inflation, they exist at the cost price and cannot be revalued. Long-Term Capital Assets are recorded at cost price in books. How is Cost Inflation Index used in Income Tax? Cost Inflation Index Table from FY 2001-02 to FY 2023-24 Financial Year In the long run, the application of the Cost Inflation Index for capital gain adjusts the purchase price of assets based on their sale price, resulting in smaller earnings and a lower tax amount. As a result, assessees must pay a greater income tax on these assets' gains. ![]() As a result, despite growing asset prices, these capital assets cannot be revalued.Īs a result, when these assets are sold, the profit or gain obtained from them remains high due to their high sale price in relation to their acquisition price. Long-term capital assets are typically documented in books at their cost price. The profit earned through the sale or transfer of any capital asset, such as land, property, stocks, shares, trademarks, patents, and so on, is referred to as capital gain. Choose from wood, metal, glass, plastic, and many other materials.A Cost Inflation Index table is used to calculate the long-term capital gains from a capital asset transfer or sale. Alternatively, you could pick a frame in their favourite style or colour and complement it with a print that says something about their style or a favourite hobby. You can place a picture of your friend or loved one inside the frame to create a personalised present that will make lasting memories. As well as instantly improving the look of your favourite rooms, picture frames make ideal wedding, Christmas, Valentine’s Day, and birthday gifts. ![]() They look particularly good when matched with modern prints. Our black picture frames help to add impact by making more of a contrast between the image and the surrounding frame. We have both contemporary and traditional designs, including frames that can be filled with more than one photo. Picture frames help to add the finishing touches to your home, and they can be fixed to different walls or placed on windowsills, display cabinets, desks, and side tables. With so many styles to choose from, you can be sure of finding the right colour, size, and style for your favourite photo, painting, or print. At B&Q, we boast one of the largest selections of picture frames in the UK.
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