INTERVIEW QUESTIONS TAX CAPITAL GAINS TAX DETAILS

Question: ​​Is the benefit of indexation available while computing capital gain arising on transfer of short-term capital asset?

Answer: Indexation is a process by which the cost of acquisition/improvement of a capital asset is adjusted against inflationary rise in the value of asset. The benefit of indexation is available only in case of long-term capital assets and is not available in case of short-term capital assets.

Indexation is a process by which the cost of acquisition/improvement of a capital asset is adjusted against inflationary rise in the value of asset. The benefit of indexation is available only in case of long-term capital assets and is not available in case of short-term capital assets. Source: CoolInterview.com

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