How does CII 384 for FY 2026-27 change your indexed cost?
The Cost Inflation Index for FY 2026-27 is 384, and it still matters for one specific tax comparison.
What exactly does CII 384 apply to?
The Cost Inflation Index of 384 was notified by CBDT Notification No. 85/2026 dated 15 July 2026, under section 72(8)(a) of the Income-tax Act 2025. It applies to tax year 2026-27, that is 1 April 2026 to 31 March 2027. It does not belong to any earlier year. For reference, FY 2024-25 is 363, FY 2025-26 is 376, and the base year FY 2001-02 is 100.
How is the indexed cost worked out?
The formula is simple. Indexed cost = cost x (CII of the year of transfer / CII of the year of acquisition, or FY 2001-02 if that is later).
Take a flat held since FY 2001-02, where the index is 100, and sold in FY 2026-27, where the index is 384. The cost is multiplied by 3.84 times. So a cost of Rs 10 lakh becomes an indexed cost of Rs 38.4 lakh. If your purchase year sits between the two, the multiplier is smaller, and our capital gains property calculator works it out on your own figures rather than a rule of thumb.
The sum, worked end to end
Indexed cost of acquisition = original cost × (CII of the year of sale ÷ CII of the year of purchase). For a sale in FY 2026-27 the numerator is 384. The denominator is the notified index for the year you bought, which you take from the CBDT cost inflation index table — it is published for every year, and it is the one figure here you must look up rather than assume.
Worked example — the shape of the calculation
Purchase cost: Rs 12,00,000. Sale in FY 2026-27, so the numerator is 384.
Suppose the notified index for your purchase year is 200 (look yours up — do not assume this one).
Indexed cost = 12,00,000 × (384 ÷ 200) = 12,00,000 × 1.92 = Rs 23,04,000
Sale consideration, say Rs 90,00,000.
Long-term capital gain with indexation = 90,00,000 − 23,04,000 = Rs 66,96,000
Tax at 20% on that = Rs 13,39,200
Without indexation the gain is 90,00,000 − 12,00,000 = Rs 78,00,000, and tax at 12.5% = Rs 9,75,000
On these figures the 12.5% route saves Rs 3,64,200 — indexation does not automatically win
That is the whole point of running both. The higher the index multiple relative to how much the property actually appreciated, the better indexation looks. Where a flat has risen sharply in value, the flat 12.5% usually wins; where it has risen modestly over a long holding period, indexation usually wins. Compute both before you choose.
Does indexation still reduce my tax?
Not directly. For transfers on or after 23 July 2024, long-term capital gains on land or building are taxed at 12.5% without indexation under Section 112 (Section 197(1)(b) of the Income-tax Act 2025). The taxable gain remains the unindexed gain.
Indexation now survives only as a cap. A resident individual or resident HUF, for property acquired before 23 July 2024, pays the lower of 12.5% without indexation or 20% with indexation. This grandfathering is not available to NRIs, companies, firms, LLPs or AOP/BOI. Long-term here means held for more than 24 months.
Which of the two computations wins depends entirely on your purchase year and price. Run both in the calculator, read our note on capital gains on redevelopment, and have a chartered accountant confirm the final figure before you file.
Work it out for your own society
Enter your purchase year, cost and sale price to see both computations side by side and the lower tax figure.
Open the Capital Gains Property CalculatorCommon questions
Is CII 384 the index for FY 2025-26?
No. CII 384 applies to tax year 2026-27, that is 1 April 2026 to 31 March 2027. It was notified by CBDT Notification No. 85/2026 dated 15 July 2026. The index for FY 2025-26 is 376, and for FY 2024-25 it is 363. Using the wrong year's index will give you the wrong indexed cost and the wrong comparison figure.
Can an NRI use indexation on a Mumbai flat sold in FY 2026-27?
No. The grandfathered option of paying the lower of 12.5% without indexation or 20% with indexation is available only to a resident individual or resident HUF, and only for land or building acquired before 23 July 2024. NRIs, companies, firms, LLPs and AOP/BOI are outside it and pay 12.5% without indexation. An NRI seller should take a chartered accountant's advice early.
Which purchase year index do I use if I bought before 2001?
If the property was acquired before FY 2001-02, you use the base year index of 100 for FY 2001-02, not an earlier figure. The indexed cost is then the relevant cost multiplied by 384 divided by 100 for a FY 2026-27 sale. Valuations for pre-2001 properties are fact-specific and often disputed, so have a chartered accountant review the working.
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