So the government decided to shift the base year to 2001 so that the asset valuations can be done quickly and accurately. And for assets (eligible for indexation) purchased before 1st April 2001, the taxpayers are allowed to take the higher actual cost or Fair Market Value as on 1st April ...
In summary, the purchase price of debt fund (investment price) is multiplied by the CII for the year in which the sale is made and divided by the CII for the year in which the purchase was made. The indexed price so arrived at is used to calculate the capital gains on which LTCG tax...