How much % benefit we get due to indexation?

Taxation
1

How much benefit we get due to indexation? I know the formula and all but I want to know in real how many % gets deducted due to indexation benefit? like 5%, 10% 15%

2

Didn’t you avail the benefit of indexation till now?

I think it depends on the price you bought something at, and the value of the index at the time of your selling.

3

If you google CII (Cost Inflation Index) you can get the exact values for all Financial years starting from 2001-02

Over the years it has increased not less 15%.

4

Thanks. CII value is calculated per year or per month?

1 Like
5

Its calculated once per year.

Its main purpose is to not tax the price increase due to inflation.

6

Maybe this will help.

A property which cost 12 lacks (base year) was valued 34.68 lacks as of oct 2019. Based on cost of 36.68 lacks, capital gain was calculated (actual sale proceeds minus cost). This is the benifit of Indexation. If Indexation was not available, cost would be considered at 12 lacks.

As this was property, there is another option to put upto 50 lacks in Tax free bonds. This will further reduce the taxable amount.

Disc: These are actual numbers.