Cost Inflation Index FY 2026-27: CII 384 Property Working

It is used only where indexation remains legally available; it is not an automatic multiplier for every long-term asset sold in 2026–27.

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Legal or Computational Framework

What the search phrase hides

The phrase cost inflation index 2026 property sale compresses several legal questions into one line. The outcome cannot be trusted until the page identifies the relevant person, transaction, period, source document and statutory exception. A high-quality calculator should therefore show why an amount was accepted or rejected instead of displaying a black-box answer.

Governing framework

General post-23 July 2024 LTCG taxation removed indexation. A resident individual or HUF selling qualifying land/building acquired before 23 July 2024 can compare tax at 12.5% without indexation with tax at 20% using indexation. CII also remains relevant to historical/transition computations where the law permits it.

Tax Year 2026–27 means income earned from 1 April 2026 under the Income-tax Act, 2025. AY 2026–27 relates to FY 2025–26 and remains under the Income-tax Act, 1961.

Computation architecture

Step-by-step method

1. Confirm that indexation is legally available.
2. identify CII for acquisition/improvement year and transfer year.
3. compute indexed cost = eligible cost × transfer-year CII ÷ relevant base-year CII.
4. calculate indexed gain and tax.
5. compare with the non-indexed method.
6. Reconcile the output to the governing statement, ledger, return schedule or employer record.

Worked example

A qualifying property cost ₹40 lakh in FY 2012–13 when CII was 200 and is sold in FY 2026–27 when CII is 384. Indexed cost is ₹76.8 lakh before improvement adjustments. Compare 20% on indexed gain with 12.5% on unindexed gain.

The example is intentionally presented as a calculation trail. The final result must be recomputed when a date, residence test, holding period, asset classification, employee category, notification, treaty or source document changes.

Rate is the final step, not the first

Capital-gain pages often begin with a percentage and therefore miss the decisive work: identifying the asset, statutory acquisition date, transfer event, cost rule, holding period and special deeming provision. A 12.5%, 20% or 30% rate is meaningful only after the gain has been correctly characterised. TDS or STT does not perform that classification.

Transaction-level audit trail

The computation should retain each acquisition lot, corporate action, cost adjustment, transfer expense, loss set-off and exemption allocation. Aggregation should occur only after character and rate are determined. This matters where a single financial year contains equity STCG, equity LTCG, property gain, VDA transactions and brought-forward losses, each with a different tax treatment.

Edge cases that change the answer

• Pre-1 April 2001 assets can use eligible FMV substitution and base-year CII: the taxpayer may substitute the fair market value as on 1 April 2001 (subject to the stamp-duty-value cap for land/building) as the cost, then index that substituted value from base-year CII 100 — not from the year the asset was actually acquired, which can be decades earlier.
• Each improvement tranche uses its own year: if capital improvement happened across multiple years (a 2015 renovation and a 2020 extension, say), each tranche is indexed separately using that specific year’s CII, not the acquisition year’s CII applied to the combined improvement total.
• Land and building may need separate evidence: where a property’s land and building portions were acquired or improved at different times (a plot bought years before construction), keep separate cost and date evidence for each rather than treating the whole property as one acquisition event.
• Indexation can increase a loss, but the grandfathering rule is a tax comparison, not an unrestricted loss election: indexation can turn a nominal gain into an indexed loss, but the taxpayer must still run the actual two-method tax comparison (12.5% unindexed vs 20% indexed) rather than simply claiming the larger indexed loss outright.
• Non-residents do not automatically receive the resident property comparison: the 12.5%-without-indexation-vs-20%-with-indexation choice is available to resident individuals/HUFs on qualifying land/building — a non-resident seller’s capital-gains computation and applicable TDS follow a different set of rules entirely.

Cross-check before filing, paying or claiming

1. Confirm that the legal year and transaction date match the rate or rule used.
2. Reconcile gross consideration, gross income or gross benefit—not merely the net bank receipt.
3. Distinguish a deduction or exemption from TDS, TCS, withholding or an employer provision.
4. Keep the original source document and a calculation worksheet.
5. Review interactions with losses, special rates, surcharge, cess, treaty relief or GST.
6. Record the official source and its effective date in the calculation output.

Calculator design standard

The Finin2min calculator linked below should retain the user's original input, display the legally accepted amount, identify the formula and rate, and state the reason for every cap or rejection. Rate-sensitive output should show the applicable tax year or effective date. Where facts cannot be automated—such as treaty PE, beneficial ownership, continuity of service or property valuation—the tool should flag professional review rather than make an unsupported assumption.

What Generic Pages Miss

Practical Documentation Checklist

• Official CII table
• Purchase/previous-owner cost record
• Registered valuer report for 1 April 2001 where relevant
• Year-wise improvement invoices
• Sale deed and transfer expenses
• Two-method tax comparison

For the complete rules on this topic, see the core guide: Capital Gains Tax Under the Income-tax Act 2025.

See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.

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