Indexed Cost of Acquisition Calculator

Formula

To calculate the Indexed Cost of Acquisition (ICOA):

\[ \text{ICOA} = \frac{\text{CII(yot)} \times \text{COA}}{\text{CII(fy)}} \]

Where:

$\text{ICOA}$ is the indexed cost of acquisition
$\text{CII(yot)}$ is the cost inflation index for the year of sale
$\text{CII(fy)}$ is the cost inflation index for the first year the asset is held by the assessee
$\text{COA}$ is the cost of the acquisition ($)

What is Indexed Cost of Acquisition?

Indexed cost of acquisition is a concept used to determine the value of an asset after adjusting it for inflation. It is a method of accounting for the impact of inflation on the cost of acquiring an asset over time. When an asset is acquired, its cost is typically recorded in monetary terms at purchase.

Example Calculation 1

Let's assume the following values:

Cost Inflation Index for Year of Sale ($\text{CII(yot)}$) = 300
Cost Inflation Index for First Year Held ($\text{CII(fy)}$) = 200
Cost of Acquisition ($\text{COA}$) = $1000

Using the formula:

\[ \text{ICOA} = \frac{300 \times 1000}{200} = 1500 \text{ dollars} \]

The Indexed Cost of Acquisition is $1500.

Example Calculation 2

Let's assume the following values:

Cost Inflation Index for Year of Sale ($\text{CII(yot)}$) = 250
Cost Inflation Index for First Year Held ($\text{CII(fy)}$) = 150
Cost of Acquisition ($\text{COA}$) = $2000

Using the formula:

\[ \text{ICOA} = \frac{250 \times 2000}{150} = 3333.33 \text{ dollars} \]

The Indexed Cost of Acquisition is $3333.33.