Cost Inflation Index: What You Need to Know

Understanding the Cost Inflation Index

The Cost Inflation Index (CII) is a crucial factor in calculating the cost of acquisition for assets in India. It is released by the Central Board of Direct Taxes (CBDT) annually and is a critical component in adjusting asset values for tax purposes.

Importance of CII

The CII is used to determine the indexed cost of an asset, which is essential for computing capital gains tax and depreciation. By applying the appropriate CII, individuals can ensure their tax calculations are accurate and compliant with regulations.