The Finance minister in his Budget Speech on Feb-01-2017, revised the Cost Inflation Index used by the Indian Income Tax Department to calculate Long Term Capital Gains Tax with Indexation benefit. The revision was shift in base year from 1981 to 2001. What does this mean ? This means any “asset” as defined by the Indian Income Tax department and which comes under the purview of Long Term Capital Gain [For Example – Real Estate] and if acquired before 2001, then for the purpose of determining the Indexed Cost of Acquisition, the base year henceforth will be 2001.
Let us illustrate with an example. Suppose you bought a Plot of Land in 1980 for Rs 10,000. You plan