Income Tax notifies the Cost Inflation Index
Computation of capital gains is based on a “cost inflation index” that is the cost of acquisition is indexed to the year of sale. The base year is 1981-82 for which the value is taken as 100. The index is based on seventy-five per cent of the average rise in the Consumer Price Index. The government has notified the cost inflation index for the year 2006-07 as 519.
NOTIFICATION NO. , Dated: September 19, 2006