What is the purpose of indexation in capital gains calculations? Option: To predict future market trends, To determine the fair market value of assets, To increase the tax burden on investors, To adjust for the effects of inflation

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What is the purpose of indexation in capital gains calculations?

To predict future market trends

To determine the fair market value of assets

To increase the tax burden on investors

To adjust for the effects of inflation

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What is the purpose of indexation in the calculation of LTCG?

To reduce the tax burden

To adjust for inflation

To increase the potential profit

To simplify the calculation

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What does the Cost Inflation Index (CII) help to achieve in the context of long-term capital gains tax?

Increase the taxable amount

Calculate the total investment value

Reduce the taxable amount by factoring in inflation

Determine the lock-in period for investments

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What is the impact of applying the Cost Inflation Index (CII) on capital gains?

It stabilizes capital gains

It has no impact on capital gains

It reduces capital gains

It increases capital gains

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What is the purpose of the Cost Inflation Index (CII) in calculating capital gains from foreign stocks?

To determine the applicable tax slab rate

To adjust the purchase cost for inflation

To convert foreign currency gains into Indian rupees

To calculate the TCS on foreign investments

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How does indexation benefit debt fund investors?

It guarantees higher returns than fixed deposits

It allows them to deduct investment expenses

It reduces their taxable capital gains amount

It exempts them from paying any capital gains tax