Can Costs of Improvement be Claimed?

Yes, costs of improvement can be claimed.

What if the Cost of Acquisition is Unavailable?

In such a case, the concerned taxpayer can use the fair market value as of April 1, 2001, as the acquisition cost.

NRI Income Tax & Compliance

Section 48 Of The Income Tax Act

By Pankaj Shaw |Last Updated: January 9, 2026

Any profit made from either the transfer or the sale of any capital asset is known as capital gains. Capital assets include jewelry, vehicles, residential, and commercial properties. However, the capital gains are part of an individual's income and are subject to taxes, but the Income Tax Act permits a deduction on these capital gains to calculate the real capital gains.

The government of India introduced these provisions to ensure income tax is accurate and fair for everyone, imposing the tax only on the actual capital gain amount.

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Frequently Asked Questions

Section 48 of the Income Tax Act allows the concerned taxpayer to calculate their capital gains by deducting the acquisition cost, improvement cost, and other sale-related expenses.

For the long term, assets sold before July 23, 2024, have their cost of acquisition and improvement reduced using the CII, the cost inflation index, to minimize capital gains.

No, it is not.

Non-resident Indians (NRIs) must convert their sale proceeds, including the acquisition costs, into the foreign currency used for the acquisition. The capital gain calculated in that foreign currency will then be converted back to INR at an applicable rate.

The full value of consideration is the actual value, as specified in the deed, except in cases such as company dissolution or gift, where the fair market value applies.

Section 48 Of The Income Tax Act

Frequently Asked Questions

What is Section 48 of the Income Tax Act?

What Does Indexed Cost Mean Under Section 48?

Is Indexation Available After July 23, 2024?

How are Capital Gains Computed for NRIs Under Section 48?

What is the Full Value of Consideration?

Section 48 Of The Income Tax Act

Frequently Asked Questions

What is Section 48 of the Income Tax Act?

What Does Indexed Cost Mean Under Section 48?

Is Indexation Available After July 23, 2024?

How are Capital Gains Computed for NRIs Under Section 48?

What is the Full Value of Consideration?