Taxation · Income Tax
In the context of corporate tax planning, what is the primary objective of using the 'Indexation' benefit when calculating Long-Term Capital Gains (LTCG) on the sale of an asset?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1To convert long-term capital losses into short-term capital gains for better accounting presentation.
- 2To allow the company to claim a 100 percent rebate on all capital gains regardless of the holding period.
- 3To adjust the purchase price of the asset to reflect the impact of inflation over the holding period, thereby reducing the taxable capital gain.✓
- 4To increase the total tax liability by multiplying the profit by the current inflation rate.
Correct answer
To adjust the purchase price of the asset to reflect the impact of inflation over the holding period, thereby reducing the taxable capital gain.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Preparing for Taxation?
Practice full-length Taxation mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Income Tax MCQs →Want more practice questions on Income Tax?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Taxation · Income Tax