Cost inflation index for FY 2020-21 used for Long Term Capital Gain calculation notified by finance ministry

  • The Cost Inflation Index (CII) for the financial year (FY) 2020-21 has been notified as 301 (For the previous financial year CII was 289 ) by the Ministry of Finance.
  • According to the finance ministry notification, The Cost Inflation Index (CII) for FY 2020-21 shall come into force with effect from 1st day of April, 2021 and shall accordingly apply to the assessment year 2021-22 i.e Financial Year 2020-21 and subsequent years.
  • The Cost Inflation Index is important as it is used to arrive at the inflation-adjusted purchase price of assets and thereby to calculate long-term capital gains (LTCG) on it when it is sold.

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