Adjusted Cost Base (ACB)

The Adjusted Cost Base (ACB) is the total cost of an investment asset — including the original purchase price plus any additional costs directly attributable to acquiring and improving the asset (such as brokerage commissions, legal fees, and reinvested distributions) — adjusted over time to reflect return-of-capital distributions, stock splits, bonus shares, and other corporate actions. ACB is a critical concept in capital gains tax calculations, as it forms the baseline against which sale proceeds are compared to determine the taxable gain or loss. In the Indian context, the equivalent concept is the 'cost of acquisition' as defined under the Income Tax Act, 1961, which may be indexed for inflation (indexed cost) or grandfathered for shares held before January 31, 2018. For investors on Ventura Securities tracking long-term equity portfolios with multiple purchases, corporate actions, and reinvestments, maintaining an accurate ACB or cost of acquisition record is essential for correct capital gains tax computation.