Cost Inflation Index for AY 2026-27: Full CII Table and Where Indexation Still Applies

The Cost Inflation Index for FY 2025-26 is 376, notified by the CBDT on 1 July 2025. That single number decides how much of your long term gain is real profit and how much is just inflation.

But there is a catch that most search results still get wrong. After the Budget 2024 changes that took effect on 23 July 2024, indexation was removed for almost every asset class. The index is still notified, still published, and still relevant, but only for a narrow set of taxpayers and assets. This guide gives you the full table, the formula, and an honest answer on whether indexation helps you at all for AY 2026-27.

What the Cost Inflation Index Actually Does

Suppose you bought a flat for Rs 20 lakh in 2010 and sold it for Rs 60 lakh in 2025. On paper you made Rs 40 lakh. In reality, a large part of that Rs 40 lakh is only the rupee losing value over fifteen years.

Indexation adjusts your purchase price upward using the CII so that you are taxed on the inflation adjusted gain instead of the nominal gain. The base year is FY 2001-02, fixed at 100. Every later year's index is set at 75 percent of the average rise in the urban Consumer Price Index for the preceding year.

The Indexation Formula

Indexed Cost of Acquisition = Original Cost x (CII of the year of sale / CII of the year of purchase)

The same formula applies separately to each cost of improvement, using the CII of the year that improvement was actually incurred. Transfer expenses such as brokerage and legal fees are never indexed. They are deducted at actual value.

Cost Inflation Index Table: FY 2001-02 to FY 2025-26

For a sale made during FY 2025-26, which is the year you are filing for in AY 2026-27, the numerator is always 376.

Where Indexation Still Applies in AY 2026-27

This is the part that matters most, because the answer changed completely in the middle of FY 2024-25.

For transfers on or after 23 July 2024, long term capital gains on all assets are taxed at a flat 12.5 percent without indexation. One exception survives, and it is written into the proviso to Section 112.

The Only Surviving Exception: Land or Building

A resident individual or HUF selling land or a building that was acquired before 23 July 2024 can pay the lower of:

• 12.5 percent on the gain computed without indexation, or
• 20 percent on the gain computed with indexation

You do not choose one method and stick with it. You compute both and pay the smaller tax.

Two practical notes on the exception. The relief is a tax computation comparison only. If the indexed method throws up a loss while the unindexed method shows a gain, you cannot report and carry forward that notional indexed loss. And the comparison is per property, not across your whole portfolio.

Worked Example 1: Modest Appreciation, Indexation Wins

Priya bought a flat in Pune in FY 2015-16 for Rs 60,00,000. She sold it in October 2025 for Rs 1,00,00,000. She is a resident individual and bought before 23 July 2024, so both methods are open to her.

Option A: 20 percent with indexation

• Indexed cost = 60,00,000 x (376 / 254) = Rs 88,81,890
• Long term capital gain = 1,00,00,000 - 88,81,890 = Rs 11,18,110
• Tax at 20 percent = Rs 2,23,622

Option B: 12.5 percent without indexation

• Long term capital gain = 1,00,00,000 - 60,00,000 = Rs 40,00,000
• Tax at 12.5 percent = Rs 5,00,000

Indexation saves Priya Rs 2,76,378. Her property grew about 1.7 times in ten years while the index grew about 1.48 times, so most of her gain was inflation rather than real appreciation.

Worked Example 2: Sharp Appreciation, 12.5 Percent Wins

Rakesh bought a plot in FY 2010-11 for Rs 30,00,000 and sold it in FY 2025-26 for Rs 1,40,00,000, paying Rs 1,50,000 in brokerage.

Option A: 20 percent with indexation

• Indexed cost = 30,00,000 x (376 / 167) = Rs 67,54,491
• Gain = 1,40,00,000 - 67,54,491 - 1,50,000 = Rs 70,95,509
• Tax at 20 percent = Rs 14,19,102

Option B: 12.5 percent without indexation

• Gain = 1,40,00,000 - 30,00,000 - 1,50,000 = Rs 1,08,50,000
• Tax at 12.5 percent = Rs 13,56,250

Here the flat 12.5 percent rate saves Rs 62,852.

The Rule of Thumb

Indexation wins when your asset barely outran inflation. The flat 12.5 percent wins when the asset multiplied several times over. As a rough guide, if your sale price is more than about seven times your purchase price for a property bought in the early 2000s, or more than about two and a half times for one bought around 2015, the 12.5 percent route is usually cheaper. Never rely on the thumb rule for the final number, because transfer costs and improvement costs shift the crossover point. Run both computations.

Assets Bought Before 1 April 2001

The index does not go back beyond FY 2001-02, so the law gives you a substitution rule.

For any capital asset acquired before 1 April 2001, your cost of acquisition is the higher of:

• the actual cost you paid, or
• the fair market value as on 1 April 2001

For land or buildings, that fair market value cannot exceed the stamp duty value as on 1 April 2001. This cap was inserted to stop inflated valuation reports.

Two things people get wrong here:

• Any cost of improvement incurred before 1 April 2001 is completely ignored, because it is treated as already baked into the 2001 fair market value
• The indexation for such assets starts from CII 100, not from the year of the original purchase in 1985 or 1992

Inherited and Gifted Assets

When you inherit or receive a capital asset as a gift, there is no capital gains tax at the point of transfer. The tax comes when you eventually sell.

For that sale:

• The cost of acquisition is what the previous owner paid
• The holding period includes the previous owner's holding period, which is why an inherited flat is almost always long term the day you receive it
• For indexation, the settled practical position followed by most taxpayers and upheld by several High Courts is to index from the year the previous owner acquired the asset

If you are also dealing with the valuation and reporting side of an inherited property, the guide to inheritance and estate taxation in India covers the documentation you will need.

Common Indexation Mistakes

Indexing the wrong year. The CII is tied to the financial year of purchase and of sale, not the calendar year. A flat registered on 15 March 2016 falls in FY 2015-16 with CII 254, not FY 2016-17 with CII 264.

Indexing brokerage and stamp duty on sale. Transfer expenses come off at actual value. Only acquisition and improvement costs are indexed.

Indexing routine repairs as improvement. Repainting, plumbing repairs and appliance replacement are not cost of improvement. Only capital additions such as an extra floor, a covered balcony or a structural extension qualify, and you need invoices.

Applying indexation to unlisted shares or gold sold in FY 2025-26. That benefit is gone for transfers on or after 23 July 2024. Selling unlisted shares now attracts a flat 12.5 percent, as explained in the guide to unlisted share taxation.

Reporting only the cheaper number without the working. Schedule CG expects a complete computation. When you file with 49Tax, both computations are run side by side for eligible property sales and the lower tax outcome is carried into the return with the supporting figures intact, so a Section 143(1) mismatch does not surface six months later.

The Takeaway

For AY 2026-27, treat the CII of 376 as a tool with one job: testing whether the 20 percent indexed route beats the flat 12.5 percent on a property you already owned before 23 July 2024. For everything else you sold during FY 2025-26, stop looking for the index and apply 12.5 percent to the plain gain. Before you file, pull out the registered sale deed of your purchase, confirm the exact financial year of acquisition, and run both computations on paper. On a property that appreciated modestly, that ten minute exercise is routinely worth two to three lakh rupees of tax.