{"id":89709,"date":"2025-06-01T10:11:03","date_gmt":"2025-06-01T10:11:03","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=89709"},"modified":"2025-06-01T10:11:03","modified_gmt":"2025-06-01T10:11:03","slug":"the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/","title":{"rendered":"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a"},"content":{"rendered":"<p>The Central Board of Direct Taxes (CBDT) in June 2013 has specified a value for the cost inflation index of 2013-14. In this regard, which of the statements given below is\/are correct?<\/p>\n<ul>\n<li>1. There has been a rise in the cost inflation index over the year 2012-13.<\/li>\n<li>2. The cost inflation index helps in reducing the inflationary gains, thereby reducing the long-term capital gains tax payout for a taxpayer.<\/li>\n<\/ul>\n<p>Select the correct answer using the code given below.<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option3&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC CAPF &#8211; 2013<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-capf-2013.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-capf-2013\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nBoth Statement 1 and Statement 2 are correct.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains.<br \/>\n&#8211; The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13.<br \/>\n&#8211; The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\n&#8211; CII for FY 2012-13 was 852. CII for FY 2013-14 was 939. This confirms Statement 1.<br \/>\n&#8211; Long-term capital gains tax is applicable on the profit made from the sale of assets held for a specified period (e.g., over 3 years for property, over 1 year for shares at that time, regulations change). Indexation benefit is available for certain long-term capital assets.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>The Central Board of Direct Taxes (CBDT) in June 2013 has specified a value for the cost inflation index of 2013-14. In this regard, which of the statements given below is\/are correct? 1. There has been a rise in the cost inflation index over the year 2012-13. 2. The cost inflation index helps in reducing &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/#more-89709\">Detailed Solution<span class=\"screen-reader-text\">The Central Board of Direct Taxes (CBDT) in June 2013 has specified a<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1467,1120,1196],"class_list":["post-89709","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1467","tag-economic-development","tag-fiscal-policy-revenue","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Central Board of Direct Taxes (CBDT) in June 2013 has specified a<\/title>\n<meta name=\"description\" content=\"Both Statement 1 and Statement 2 are correct. - The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains. - The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13. - The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a\" \/>\n<meta property=\"og:description\" content=\"Both Statement 1 and Statement 2 are correct. - The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains. - The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13. - The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:11:03+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a","description":"Both Statement 1 and Statement 2 are correct. - The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains. - The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13. - The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/","og_locale":"en_US","og_type":"article","og_title":"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a","og_description":"Both Statement 1 and Statement 2 are correct. - The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains. - The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13. - The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T10:11:03+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/","url":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/","name":"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T10:11:03+00:00","dateModified":"2025-06-01T10:11:03+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Both Statement 1 and Statement 2 are correct. - The Cost Inflation Index (CII) is notified by the Central Government under the Income Tax Act, 1961. It is used to adjust the purchase price of an asset for inflation when calculating long-term capital gains. - The CII for a financial year is typically higher than that of the previous financial year, reflecting the general trend of inflation. Given the inflationary environment in India around 2013, it is highly likely that the CII for 2013-14 was higher than that for 2012-13. - The purpose of indexation using CII is to account for the decrease in the purchasing power of money due to inflation. By indexing the cost of acquisition and improvement, the taxable capital gain is reduced, as it accounts for only the real gain over and above inflation. This directly reduces the long-term capital gains tax liability for the taxpayer.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/the-central-board-of-direct-taxes-cbdt-in-june-2013-has-specified-a\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CAPF","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-capf\/"},{"@type":"ListItem","position":3,"name":"The Central Board of Direct Taxes (CBDT) in June 2013 has specified a"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/89709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=89709"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/89709\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=89709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=89709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=89709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}