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Computation of Long Term Capital Gain/Loss

Long term capital gain means capital gain arising from transfer of long term capital asset. Indexation benefit is available for long term capital gains.

Long term capital gain is computed as under

Long Term Capital Gain/LossAmount
Full value of consideration
Less: Expenses incurred wholly and exclusively in connection with such transfer
                                                                                                        Net ConsiderationLess: Indexed Cost of acquisition
Less: Indexed Cost of improvement                                                                                              Long Term Capital Gains
Less: Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB
xxx
xxx
xxxxxx
xxxxxx
xxx
                                              Taxable Long Term Capital Gain (Loss if negative)XXX

Securities Transaction Tax (STT) is not allowed as deduction of expenses while calculating capital gain whether short term or long term.

Indexed Cost of Acquisition = (Cost of Acquisition x CII of year of transfer) / CII of year of acquisition of asset or CII for year 1981 whichever is later.

Indexed Cost of Improvement = Cost of Improvement x CII of year of transfer) / CII of year in which improvement took place

Cost Inflation Index (CII) Table

Prateek Agarwal

Prateek Agarwal

I am Practicing Chartered Accountant from Jaipur and in practice for more than 9 years. I writes mainly for GST and Finance.

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