Indexation and the CII chart for capital gains 2026

Indexation is the mechanism that adjusts your purchase price upward for inflation before calculating the capital gain. If you bought property for ₹20 lakh in 2008 and sold it for ₹80 lakh today, your actual gain isn't ₹60 lakh — the ₹20 lakh you paid in 2008 had much more purchasing power than ₹20 lakh today. Indexation accounts for that.

The CII (Cost Inflation Index) is the government-notified number that quantifies this inflation adjustment each year. Using it can substantially reduce your taxable LTCG — but after the July 2024 Budget, the rules on when you can use it changed.

For an overview of all capital gains tax rates and exemptions, see the capital gains tax India 2026 guide.

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What is the Cost Inflation Index?

The Central Board of Direct Taxes (CBDT) notifies a CII number for each financial year. The base year is FY 2001-02 with a CII of 100. Each subsequent year's CII reflects cumulative inflation as measured by the government.

CBDT notified CII of 376 for FY 2025-26 via Notification 70/2025 dated 1 July 2025. The FY 2024-25 value was 363.

When you calculate indexed cost of acquisition, you multiply your original purchase price by (CII of the sale year divided by CII of the purchase year). This gives you the inflation-adjusted cost — the figure you subtract from sale proceeds to arrive at taxable LTCG.

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CII table: FY 2001-02 to FY 2025-26

Financial year	Assessment year	CII
2001-02	2002-03	100
2002-03	2003-04	105
2003-04	2004-05	109
2004-05	2005-06	113
2005-06	2006-07	117
2006-07	2007-08	122
2007-08	2008-09	129
2008-09	2009-10	137
2009-10	2010-11	148
2010-11	2011-12	167
2011-12	2012-13	184
2012-13	2013-14	200
2013-14	2014-15	220
2014-15	2015-16	240
2015-16	2016-17	254
2016-17	2017-18	264
2017-18	2018-19	272
2018-19	2019-20	280
2019-20	2020-21	289
2020-21	2021-22	301
2021-22	2022-23	317
2022-23	2023-24	331
2023-24	2024-25	348
2024-25	2025-26	363
2025-26	2026-27	376

Source: CBDT official notifications. For assets acquired before 2001-02, the cost of acquisition is taken as the Fair Market Value (FMV) as on 1 April 2001 — not the original historical cost.

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How to calculate indexed cost of acquisition

Formula:

Indexed cost = Original cost × (CII of sale year / CII of purchase year)

Then:

Taxable LTCG (with indexation) = Sale price − Indexed cost

The resulting gain is taxed at 20%.

Note on property purchased in FY 2000-01 or earlier

If you bought property before 1 April 2001, you use the FMV on that date as the deemed cost — not your actual purchase price. This was to avoid disputes over pre-2001 values when the base year was shifted from 1981 to 2001. The FMV as on 1 April 2001 should be backed by a registered valuer's report.

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When indexation still applies after the July 2024 Budget

The July 2024 Finance (No. 2) Act significantly restricted indexation. Here is exactly what still applies:

Indexation available:

• Immovable property (house, land, building) acquired before 23 July 2024 and transferred on or after that date — for resident individuals and HUFs only
• These taxpayers can choose: pay 12.5% without indexation, or 20% with indexation (whichever is lower)
• This grandfathering option is not available to non-residents (NRIs), companies, or LLPs

Indexation no longer available:

• Property purchased on or after 23 July 2024 — taxed at 12.5% without indexation only
• Gold, jewellery, unlisted shares (purchased at any time) — taxed at 12.5% without indexation from 23 July 2024 onward
• Debt mutual funds — slab rate regardless (this removed indexation for debt funds from April 2023)
• Listed equity shares and equity mutual funds — indexation was never applicable to these

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Worked example: indexation calculation on property

Scenario: Ramesh (resident individual, HUF member) bought a flat in FY 2007-08 for ₹25 lakh. He sells it in FY 2025-26 (June 2025) for ₹1.1 crore.

Since the property was purchased before 23 July 2024, Ramesh can compare both options.

Option A — 12.5% without indexation:

• LTCG = ₹1.1 crore − ₹25 lakh = ₹85 lakh
• Tax = 12.5% × ₹85 lakh = ₹10.625 lakh

Option B — 20% with indexation:

• CII FY 2007-08: 129 (purchase year)
• CII FY 2025-26: 376 (sale year)
• Indexed cost = ₹25L × (376 / 129) = ₹25L × 2.914 = ₹72.87 lakh
• LTCG = ₹1.1 crore − ₹72.87 lakh = ₹37.13 lakh
• Tax = 20% × ₹37.13 lakh = ₹7.43 lakh

Option B saves ₹3.2 lakh. For a property bought in 2007-08, the indexed cost at 2025-26 CII is roughly 2.9x the original — which dramatically reduces the taxable gain.

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When does 12.5% without indexation win?

The two options produce the same tax at roughly the crossover point where:

12.5% × (Sale − Cost) = 20% × (Sale − Indexed cost)

For most properties acquired before 2015, the indexed cost will be large enough that Option B (20% + CII) will produce less tax. For properties bought closer to July 2024 where there's been limited inflation, Option A (12.5% without) may be equal or lower.

A quick rule of thumb: if you bought the property more than 8-10 years ago, run the indexed calculation — it almost always wins. For more recent purchases, the 12.5% flat rate may be competitive.

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Indexation on gold: no longer available

Before July 2024, selling gold held for more than 36 months (now 24 months) attracted LTCG at 20% with indexation. That option is gone for transfers on or after 23 July 2024. Gold LTCG is now at 12.5% without indexation regardless of when you purchased it.

The rate change (lower percentage) partially offsets the loss of indexation benefit, but for gold held for a very long time, the indexation benefit was often larger than the 7.5 percentage-point rate difference.

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Indexation and the CII in ITR filing

In your ITR (Schedule CG), you enter:

• Full value of consideration (sale price)
• Cost of acquisition
• Cost of improvement (if any)
• Indexed cost of acquisition (CII of sale year / CII of purchase year × cost)

The tax department cross-checks these numbers. Keep documentation of your original purchase deed, improvement invoices, and the CII values you used.

For property acquired before 2001, you need a registered valuer's report establishing FMV as on 1 April 2001. Without this document, the tax officer may dispute your indexed cost figure.

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CII and Sections 54/54F exemptions

When you claim a Section 54 or 54F exemption after selling property with indexation, the LTCG for which you're claiming the exemption is the indexed LTCG — the lower, post-indexation figure. This means the indexed route reduces both your tax liability and the size of the gain you need to reinvest to achieve full exemption.

Details on Sections 54, 54F, and 54EC: Capital gains exemptions — how to save LTCG on property.

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CII for mutual funds: the historical context

Prior to April 2023, long-term gains on debt mutual funds were taxed at 20% with indexation — the same mechanism used for property. That benefit was removed with effect from 1 April 2023 under the Finance Act 2023. Debt fund gains are now taxed at your income-tax slab rate regardless of how long you held them. The CII table is therefore not relevant for debt mutual fund investors going forward.

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This article is for informational purposes only. For personalised tax advice, consult a chartered accountant.

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Frequently asked questions

What is the CII for FY 2025-26?

The CBDT notified the Cost Inflation Index (CII) for FY 2025-26 as 376, via Notification 70/2025 dated 1 July 2025. This is used as the sale-year CII for properties and other eligible assets sold in FY 2025-26 (April 2025 to March 2026).

What is the CII for FY 2023-24?

The CII for FY 2023-24 (Assessment Year 2024-25) is 348. This would be your purchase-year CII if you bought a property between April 2023 and March 2024 and are calculating indexed cost for a later sale — though for properties bought after 23 July 2024, indexation is not available.

Does indexation still apply on property sales in India after the 2024 Budget?

Yes, but with a specific condition: the property must have been purchased before 23 July 2024. If you sell such a property today, you can opt for either 12.5% without indexation or 20% with indexation — choose whichever gives a lower tax. For properties purchased on or after 23 July 2024, only 12.5% without indexation is available.

How is indexed cost of acquisition calculated?

Indexed cost = Original purchase price × (CII of the financial year of sale ÷ CII of the financial year of purchase). For property bought before 2001-02, use Fair Market Value on 1 April 2001 as the denominator base instead of the original cost. The result is the inflation-adjusted cost that you subtract from the sale price to arrive at taxable LTCG.

Can NRIs use the indexation option for property sold in India?

No. The grandfathering option (choosing 20% with indexation for pre-July 2024 purchases) is available only to resident individuals and HUFs. Non-resident individuals (NRIs), companies, firms, and LLPs selling property in India after 23 July 2024 are taxed at 12.5% without indexation regardless of when the property was acquired.

Is indexation available on gold sold in India?

No. From 23 July 2024, LTCG on gold is taxed at 12.5% without indexation. The earlier option of 20% with indexation on gold held for more than 24 months was removed by the Finance (No. 2) Act 2024. This applies to all gold transfers on or after that date, regardless of when the gold was purchased.