BUSINESS LAW.

NISHA PATEL
ROLL NO-63
Income TAX.
 UNDER CAPITAL GAINS:

 COST OF ACQUISITION.

 COST OF IMPROVEMENT.
COST OF ACQUISITION.
It is the value for which the asset is acquired by
assessee.

Expenses which are of capital in nature are included

here.

It is a deduction (i) which comes under short term

capital gains.
COST OF IMPROVEMENT.
It a capital expenditure incurred further in making any
improvement to the capital assests.

It also includes any expenditure incurred to protect or

complete the title to the capital assets.

It is a deduction (ii) which comes under short term

capital gains.
COST INFLATION INDEX.
It is measured by the government every year.

It is the measure of inflation,which helps to compute

long term capital gains on the sale of an asset.

1980-81 is the base year(100) & government has

announced highest CII in 2009-10 i.e 632.
INDEXED COST OF ACQUISITION=
Cost of acquisition *indexed year of transfer/year of
purchase.

INDEXED COST OF IMPROVEMENT=

Cost of improvement *indexed year of transfer/year of
improvement.