Cost Inflation Index for F.Y. 2009-10

The Government of India has notified the Cost Inflation Index (CII) for the financial year 2009-10 to be 632.The index for the last year was 582.
This concept was started from Financial Year 1981-82 whose index is kept as 100 (base year). From then the Govt. has been continuously notifying the CII for each year based on the level of inflation. This is mainly used for income tax purposes for calculating the value of long term capital gains. The gain/loss on sale of asset is calculated by subtracting from the sale value, the indexed cost of the asset, which is calculated as:

Original Cost of the Asset x Current year CII /CII in the year of purchase

However this index also shows the impact of rising prices. Last year the inflation index rose by 31 points from its previous year. This year the index rose by 50 points from its last year value of 582. Thats quite a substantial margin.