In Budget 2017, the base for Cost Inflation Index is changed. lets see what the change is and how it wil impact the investors.
Currently, for cost inflation index, the base year is 1981. which means if you have any property acquired before 1981, you need to get the fair market value in 1981 and then apply indexation.
Now, with the proposed changed, the base year will become 2001. This means, if you have any property acquired before 2001, you need to get the fair market value in 2001 and then apply indexation.
In my other post, I gave details of indexation chart from 1981 till 2017 – Read this
[xyz-ihs snippet=”ad1″]
What is the impact?
Property Owners: Experts think that property owners would benefit from this revision in base year. This is because the inflation rate in property market between 1981 and 2001 is not captured in the current index.
For example , between 1981 and 2001, the index has jumped four times from 100 to 406 whereas property prices have surged 10 times in the same period. The shift in base year will help align the index with the actual rise in property rates, and help investors get the full benefit of indexatio.
Gold Investors: Shift in base year will not have much impact on Gold Investors as the gold prices were mainly appreciated after 2007
In my other post, I gave details of indexation chart from 1981 till 2017 – Read this