How does the new rule simplify the computation of capital gains?
The new rule simplifies capital gains computation by eliminating the need to adjust the purchase price for inflation using the Cost Inflation Index (CII). Taxpayers now calculate gains by directly subtracting the cost of acquisition and cost of improvement from the sale price. This makes the process faster and easier. Also, it eliminates complex tax calculations that were earlier made using the different values of Cost Inflation Index (CII). However, this change can increase tax liabilities for many, as it removes the benefit of inflation adjustment.