Tax Computation · Panaji, Goa
Accurate capital gains computation — indexed cost, CII tables, Section 50C adjustments, loss set-off, and Schedule CG filing by qualified Chartered Accountants in Goa.
Overview
A capital gains computation error is not just a tax mistake — it can trigger an income tax notice, interest under Section 234B/234C, and a best-judgement assessment. Common errors include ignoring the Section 50C stamp duty value, applying CII from the wrong year, missing grandfathering for pre-2018 equity, or failing to index cost of improvement separately.
Budget 2024 added another layer of complexity: for immovable property sold after 23 July 2024, taxpayers must compare 20%-with-indexation against 12.5%-without-indexation and choose the more beneficial option for pre-July 2024 acquisitions. Our capital gain on sale service and CG on securities page explain the rules by asset class.
Computation components
We compute each element accurately and document it for scrutiny-ready ITR filing.
Talk to our CA →The actual sale price — or, for property, the higher of the sale price or stamp duty value under Section 50C. For gifts or transactions below fair market value, Section 50B/50CA may apply to unlisted shares and slump sales.
The original purchase price (or FMV on 1 April 2001 for pre-2001 assets) indexed by the Cost Inflation Index for the acquisition year to the sale year. For inherited or gifted assets, we trace back to the previous owner's cost.
Capital expenditure on renovations, extensions, or legal additions to the asset — indexed separately from the year in which improvement was made. Routine repairs do not qualify.
Brokerage, registration charges paid by the seller, legal fees, and costs of obtaining NOCs or clearance certificates. These are deducted from the consideration before arriving at the net gain.
Applying the correct holding period threshold — 12, 24, or 36 months depending on asset type — to determine STCG (taxed at slab rate or 20%) or LTCG (taxed at 12.5% or special rates).
Setting off STCL against STCG and LTCG, LTCL against LTCG only, and carrying forward unabsorbed losses for 8 years — ensuring the correct income figure in Schedule CG of ITR-2.
Step-by-step
Purchase deed, sale deed, improvement invoices, broker statements, and any prior-owner records for inherited assets.
Determine the asset type and holding period to confirm STCG or LTCG and the applicable tax rate and indexation eligibility.
Index acquisition and improvement costs using the correct CII year; check Section 50C if property; apply grandfathering for pre-2018 equity.
Arrive at net gain, set off eligible losses, apply exemptions, and report accurately in Schedule CG of ITR-2 or ITR-3.
Frequently asked questions
Capital Gain = Full Value of Consideration − (Indexed Cost of Acquisition + Indexed Cost of Improvement + Transfer Expenses). For LTCG eligible for indexation, each cost is multiplied by (CII of sale year ÷ CII of acquisition year). For assets where indexation is not available (e.g., listed equity, post-July 2024 acquisitions), the actual unindexed cost is used.
The CII is notified annually by the Central Government (base year FY 2001-02 = 100). It inflates the original cost of an asset to its equivalent value in the year of sale, reducing the taxable gain to reflect only real (inflation-adjusted) profit. For example, CII for FY 2024-25 is 363; an asset bought for ₹10 lakh in FY 2001-02 has an indexed cost of ₹36.3 lakh, drastically reducing the taxable gain.
For assets acquired on or after 23 July 2024, indexation is removed and LTCG is taxed at 12.5% on the actual gain. For assets acquired before that date, taxpayers selling immovable property after 23 July 2024 may choose whichever is more beneficial — 20% with indexation or 12.5% without. Listed equity and equity mutual funds are governed separately under Section 112A (12.5% LTCG, no indexation, ₹1.25 lakh annual exemption).
For inherited assets, the cost is the cost to the previous owner (the deceased). If the asset was acquired before 1 April 2001, FMV on that date can be substituted. The holding period includes the period it was held by all previous owners. No capital gains tax applies at the time of inheritance — tax arises only on the heir's eventual sale.
STCL can be set off against both STCG and LTCG in the same year. LTCL can only be set off against LTCG. Capital losses cannot offset salary, rent, or business income. Unabsorbed losses carry forward for 8 assessment years, but only if the ITR was filed on time (before the due date). Filing a belated return forfeits the carry-forward right.
Section 50C deems the stamp duty value (circle rate) as the sale consideration if it exceeds the actual price. If the difference is within 10% (actual price ≥ 90% of stamp duty value), the actual price is used. Where the seller disputes the stamp duty value, they can request a reference to the Assessing Officer for a valuation by the Department's Valuation Officer.
ITR-2 is used by individuals and HUFs with capital gains but no business income. ITR-3 is used where business or professional income also exists. Both include Schedule CG with separate disclosures for each type of gain — Section 111A, 112A, property gains, and other gains. Accurate Schedule CG filing requires the original purchase date, consideration, indexed cost, exemptions claimed, and net taxable gain for each transaction.
Related services
An incorrect computation invites notices, interest, and penalties. Let our qualified CAs in Panaji, Goa compute your gain with full documentation, identify every deduction, and file a scrutiny-ready ITR.