For example, Mr. A purchased a capital asset on 15.2.2015 for Rs. 15 lakh and sold the same on 15.9.2022 for 22 lakh. Now, let’s Calculate the indexed cost of capital asset-
The indexed cost of acquisition = Cost of acquisition
X (CII of the year of transfer / CII of the year of acquisition)
= 15,00,000 X 331 / 254
= 1,95,000