Certain shares, originally listed, became unlisted after a few years. Their FMV in 2001-02 is not available, as the company has not been sending annual reports. The shares were acquired in FYs 1986-87 and 1990-91, and are likely to be disposed of in FY 2019-20. Can the following cost inflation indices for these two FYs be worked out as below, with the base as the new CII series (effective FY 2001-02 = 100)?
FY Old Series New Series
CII base FY 1981-82 = 100 CII base Fy 2001-02 = 100
2001-02 426 100
1990-91 182 100 divided by
(426/182) =43 approx.
1986-87 140 100 divided by
(426/140) = 33 approx.
Thus, for LTCG calculation at the time of sale in FY 2019-20 (new series CII = 489 for FY 2019-20), the CII factor to be applied would be:
a) for shares purchased in FY 1990-91 : cost of purchase X 289/43
b for shares purchased in FY 1986-87 : cost of purchase X 289/33.
Thank you.
CAclubindia
