Know about Mutual Funds | जानिए म्यूचुअल फण्ड के बारे में
How to Calculate Long Term Capital Gain on Asset
If investor sale units after a period of 1 year in case of equity funds and 3 years in case of non equity funds, long term capital gain/loss arises. Long term capital gain is tax free in case of equity oriented funds, however it is taxable in case of non-equity funds. In case of non-equity funds indexation benefits are available.
Profit to sale an asset = Sale Value - Purchase Value
However
Capital Gain on an Asset = Sale Value - Indexed value of Asset
Long Term Capital Gain = Cost of Sale - Indexed Cost of Asset
Calculation of Indexed Cost of an Asset
Indexed cost of an asset = Cost of purchase * (Index in year of sale / Index in year of Purchase)
Example to Calculate Capital Gain :
Suppose an investor purchases any asset on 30.04.2010 for Rs.1,00,000 and sold it on 01.05.2013 for Rs.1,40,000. We have to calculate long term capital gain.
Here indexed cost of asset = Rs. 100000*(939/711)
= 132067.51
Now capital gain = 140000-132067.51
= Rs. 7932.49
For the help of readers to calculate indexed cost of an asset, cost inflation index is given below :
Cost Inflation Index
| Financial Year | Cost Inflation Index | Financial Year | Cost Inflation Index |
|---|---|---|---|
| 1981-1982 | 100 | 1999-2000 | 389 |
| 1982-1983 | 109 | 2000-2001 | 406 |
| 1983-1984 | 116 | 2001-2002 | 426 |
| 1984-1985 | 125 | 2002-2003 | 447 |
| 1985-1986 | 133 | 2003-2004 | 463 |
| 1986-1987 | 140 | 2004-2005 | 480 |
| 1987-1988 | 150 | 2005-2006 | 497 |
| 1988-1989 | 161 | 2006-2007 | 519 |
| 1989-1990 | 172 | 2007-2008 | 551 |
| 1990-1991 | 182 | 2008-2009 | 582 |
| 1991-1992 | 199 | 2009-2010 | 632 |
| 1992-1993 | 223 | 2010-2011 | 711 |
| 1993-1994 | 244 | 2011-2012 | 758 |
| 1994-1995 | 259 | 2012-2013 | 852 |
| 1995-1996 | 281 | 2013-2014 | 939 |
| 1996-1997 | 305 | 2014-2015 | 1024 |
| 1997-1998 | 331 | 2015-2016 | 1081 |
| 1998-1999 | 351 | 2016-2017 | 1125 |