a system of economic regulation in which wages and interest are tied to the cost-of-living index in order to compenaste for the effects of inflation.
Price adjustment which allows capital or income to take account of, or benefit from, inflation.
An automatic revision of the nominal prices to take account of inflation. Wages, unemployment benefits, the value of financial assets and other sources of income are revised upwards to keep in line with inflation and protect their real value. Français: Indexation Español: Indización, indexación
This means making adjustments to allow for the effects of inflation.
The central government specifies an index linked to the wholesale price index. The indices of two years (year of purchase and the year of sale) are used for the purpose of computing capital gains tax. The purchase price is multiplied by the index of the year of sale and the product is divided by the index of the year of purchase. This benefit is available only if the security has been held for more than 12 months. On sale of equity-oriented mutual fund schemes, one can opt for paying tax at the rate of a flat 10% or go in for paying 20% after taking the benefit of indexation.
A method by which payments or benefits go up or down in line with an index of prices or earnings.
Adjusting the level of wages, prices, taxation and other living costs or investments in line with the level of inflation.
The process of automatically linking prices with monetary obligations. For example, the interest on government issued securities may be linked to changes in the retail price index.
A method by which benefits are increased at periodic intervals by a factor derived from an index of prices or earnings.
The capital gains arising out of selling mutual fund units are taxed at Long Term Capital Gains rate if they are held for more than one year. The Long term capital gains rate can be computed either as 10 % flat or 20 % with indexation benefit. For this the government has specified an index linked to the wholesale price index. The indices of two years (year of purchase and the year of sale) are used for the purpose of computing capital gains tax. The purchase price is multiplied by the index of the year of sale and the product is divided by the index of the year of purchase. This indexed purchase price is deducted from the sale price to calculate the indexed capital gains. The tax rate of 20 % is applied to the indexed capital gains.
A policy where premiums and benefits increase annually in accordance with increases in the inflation index.
1. A system whereby pensions in payment and/or preserved benefits are automatically increased at regular intervals by reference to a specified index of prices or earnings. Occasionally used in relation to index linking of final pensionable earnings or final remuneration: see definition 1 of dynamisation. 2. An investment strategy designed to produce a rate of return in line with a particular index, either by replicating the constituents or by sufficient sampling to give a proxy.
In pension planning, the adjustment of postretirement benefits to compensate for the effects of inflation. Benefits are generally indexed to increase in accordance with an increase in the level of a price index such as the Consumer Price Index (CPI). See also cost-of-living adjustment (COLA). | Back
The regular adjustment of a rent in accordance with a specified index, eg the Retail Price Index.
The automatic adjustment of monetary payment amounts to inflation.
A method by which social welfare payments would be increased by a certain amount each year. This amount would relate to a particular factor index in the economy eg inflation, earnings, incomes.
annual adjustments made to Commonwealth contributions, maximum student contributions, HELP debts and repayment thresholds to maintain their real value.
Linking the value of a security (usually the acquisition value) to the value of a specified index, and adjusting it accordingly. This is an important element in calculating tax liability on long-term capital gains, because inflation otherwise tends to distort the capital gain, and hence artificially increases the tax liability.
a means to increase the premiums to a plan in order to reduce the effects of inflation. Premiums are normally increased in line with RPI (Retail Prices Index) or NAEI (National Average Earnings Index).
This is a way of measuring changes in prices or earnings, and adjusting pensions in line with these changes. For example, if a pension was linked to a price index, and prices rose by five per cent, then the pension would also rise by five per cent.
This is a way in which compensation in payment is adjusted from time to time with reference to changes in the level of retail prices, and possibly subject to other legal provisions.
Modifying contracts so that their dollar terms adjust to the inflation rate as measured in an index, such as the consumer price index.
Making an adjustment to allow for the effects inflation can have on money, used to reduce the amount payable in Capital Gains Tax. Another name for Index Tracking. An investment strategy designed to produce a rate of return in line with a specific financial index.
An adjustment on price and wage levels based on the level of inflation or other selected measures.
Indexation is a technique to adjust income payments by means of a price index. This to keep up the purchasing power of the public after inflation.