Base cost

Tax Glossary Definition

Base cost

Base Cost – The initial value or purchase amount of an asset, representing the benchmark used to calculate any capital gain or loss when the asset is sold or transferred. This value can also include costs directly linked to acquiring or improving the asset, such as stamp duty, legal expenses, or brokerage fees.

Example: Suppose a property is bought for ₹50 lakh and later sold for ₹80 lakh. The ₹50 lakh represents the base cost, which is used to determine the capital gain of ₹30 lakh.

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