RAHUL (Self Employed) (129 Points)
23 September 2008In T.N. Manoharan income tax for PCC, AY 2008-09 page no. 347, it is given under "INDEXATION" -This principle of indexation has been introduced for the first time from ay 1993-94. Therefore, only if computation of long term capital gains is made with reference to assessment year 1993-94 and subsequent years, indexation principle becomes applicable and not otherwise.
Then why there is CII factors for the FY before 1993-94 is given?
What does it actually mean?
CA. Dashrath Maheshwari
(TaXpert)
(15103 Points)
Replied 23 September 2008
ya, its true,
It means, in the assessment of income for the year prior to 1993-94, indexation benefit was not available.
in the year 1993-94, first time this scheme has been introduced with a base year of 1981 for which the index value introduced as 100 and then calculated index keeping that base value and cost inflation index per capita, upto 1993-94.
from that year its a continues process...the government has specified an index linked to the wholesale price index. The indices of two years (year of purchase and the year of sale) are used for the purpose of computing capital gains tax.
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