Pending professional review. This content was drafted with Claude from official sources and has not yet been reviewed by an ArthaKara professional. Verify against the official sources before relying on it.
Simple meaningAdjusting purchase cost for inflation using a government index.
Relevant ActIncome-tax Act, 1961
Section / ruleSection 48, Explanation
Technical meaning
Increasing the cost of acquisition by the Cost Inflation Index ratio for computing long-term capital gains; withdrawn for most transfers from 23 July 2024, with an option retained for land and buildings acquired before that date by resident individuals and HUFs.
Practical example
Land bought in 2010 can use indexed cost when computing the alternative 20% tax.
Related terms
Official reference
Income-tax Act, 1961, Section 48, Explanation
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