There are numerous asset classes for example equity, debt, gold and property in which you invest in line with the time horizon of your financial goals in addition to risk appetite. Increases in size from these investments are mentioned as capital gains and so are taxed differently. Since any levy liability impacts your returns in the investment, it's important to possess awareness on the internet gains you may receive.
Capital gain is a type of Income tax which you need to pay on gains which may arise from purchase and sale of property, equity, bonds etc. Tere are two types of capital gains.
1- Shaort term capital gain
2- Long term capital gain
Long term capital gain
Calculation of long term capital gain is not so easy. It includes cost inflation index data to calculate the tax liability of long term capital gain. Every year CBDT issue CII data which which the long term capital gain is calculated.
For example if Mr. A has purchased a property in 2001 with a cost of Rs. 1000000 and sold it at 1800000 in 2010. With simple calculation the tax liability is 8 lakh whereas with the help of CII, the tax liability is reduced to 26983 including education cess which is 3% on capital gains tax.
This is an excel based calculator which will help to calculate the long term capital gain.
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