{"id":10539,"date":"2026-07-18T08:40:11","date_gmt":"2026-07-18T08:40:11","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=10539"},"modified":"2026-07-18T08:42:35","modified_gmt":"2026-07-18T08:42:35","slug":"cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/","title":{"rendered":"CBDT Notifies Cost Inflation Index (CII) for TY 2026-27"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-10542\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM.jpeg\" alt=\"CII\" width=\"1254\" height=\"1254\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM.jpeg 1254w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM-300x300.jpeg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM-1024x1024.jpeg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM-150x150.jpeg 150w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM-768x768.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2026\/07\/WhatsApp-Image-2026-07-17-at-4.22.01-PM-800x800.jpeg 800w\" sizes=\"(max-width: 1254px) 100vw, 1254px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a5b755a93df1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a5b755a93df1\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#CBDT_Notifies_Cost_Inflation_Index_for_TY_2026-27_What_It_Means_for_Property_Owners_and_Taxpayers\" title=\"CBDT Notifies Cost Inflation Index for TY 2026-27: What It Means for Property Owners and Taxpayers\">CBDT Notifies Cost Inflation Index for TY 2026-27: What It Means for Property Owners and Taxpayers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#New_Cost_Inflation_Index_for_TY_2026-27\" title=\"New\u00a0Cost Inflation Index for TY 2026-27\">New\u00a0Cost Inflation Index for TY 2026-27<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#What_is_the_Cost_Inflation_Index\" title=\"What is the Cost Inflation Index?\">What is the Cost Inflation Index?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Why_Does_the_Increase_to_384_Matter\" title=\"Why Does the Increase to 384 Matter?\">Why Does the Increase to 384 Matter?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Relevance_Under_the_Income-tax_Act_2025\" title=\"Relevance Under the Income-tax Act, 2025\">Relevance Under the Income-tax Act, 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Choice_Between_20_with_Indexation_and_125_Without_Indexation\" title=\"Choice Between 20% with Indexation and 12.5% Without Indexation\">Choice Between 20% with Indexation and 12.5% Without Indexation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Illustrative_Impact_of_cost_inflation_index\" title=\"Illustrative Impact of cost inflation index\">Illustrative Impact of cost inflation index<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Trend_in_Recent_cost_inflation_index\" title=\"Trend in Recent cost inflation index\">Trend in Recent cost inflation index<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/cbdt-notifies-cost-inflation-index-cii-for-ty-2026-27\/#Key_Takeaway_for_Tax_Professionals\" title=\"Key Takeaway for Tax Professionals\">Key Takeaway for Tax Professionals<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"CBDT_Notifies_Cost_Inflation_Index_for_TY_2026-27_What_It_Means_for_Property_Owners_and_Taxpayers\"><\/span><span style=\"color: #000080;\">CBDT Notifies Cost Inflation Index for TY 2026-27: What It Means for Property Owners and Taxpayers<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\n<p>The Central Board of Direct Taxes (CBDT) has officially notified the <strong>Cost Inflation Index for Tax Year (TY) 2026-27 at 384<\/strong>, effective from <strong>1 April 2026<\/strong>. This marks an increase from the previous year&#8217;s CII of <strong>376<\/strong>, providing taxpayers with a higher inflation adjustment while computing long-term capital gains, wherever indexation benefits continue to be available.<\/p>\n<p>While the increase may appear modest, it can have a meaningful impact on the tax liability arising from the sale of eligible capital assets, particularly immovable properties acquired before the recent tax law changes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"New_Cost_Inflation_Index_for_TY_2026-27\"><\/span><span style=\"color: #000080;\">New\u00a0Cost Inflation Index for TY 2026-27<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 106px;\" width=\"834\">\n<tbody>\n<tr>\n<th>Tax Year<\/th>\n<th>Cost Inflation Index (CII)<\/th>\n<\/tr>\n<tr>\n<td>2025-26<\/td>\n<td>376<\/td>\n<\/tr>\n<tr>\n<td>2026-27<\/td>\n<td>384<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>The increase of <strong>8 points<\/strong> reflects inflationary adjustments recognized under the tax law and allows eligible taxpayers to increase the indexed cost of acquisition when calculating long-term capital gains.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_Cost_Inflation_Index\"><\/span><span style=\"color: #000080;\">What is the Cost Inflation Index?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <strong>Cost Inflation Index <\/strong>is a measure notified annually by the CBDT to account for inflation in the value of capital assets over time.\u00a0Indexation adjusts the original purchase cost of an asset to reflect inflation, ensuring taxpayers are taxed only on the real appreciation in value rather than gains arising merely from rising prices.\u00a0The indexed cost is calculated using the following formula:<\/p>\n<p><span style=\"color: #000080;\"><strong>Indexed Cost of Acquisition = Cost of Acquisition \u00d7 (Cost\u00a0Inflation Index of Year of Transfer \u00f7\u00a0Cost Inflation Index\u00a0of Year of Purchase)<\/strong><\/span><\/p>\n<p>A higher CII results in a higher indexed cost, which in turn reduces taxable long-term capital gains.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_Does_the_Increase_to_384_Matter\"><\/span><span style=\"color: #000080;\">Why Does the Increase to 384 Matter?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The rise in the cost inflation index\u00a0from 376 to 384 means that taxpayers selling eligible assets during TY 2026-27 can claim a slightly higher inflation-adjusted cost.\u00a0This can lead to Higher indexed cost of acquisition, Lower taxable long-term capital gains, and potential reduction in overall tax liability.\u00a0Although the annual increase is relatively small, the cumulative impact can be substantial for assets held over several years, particularly real estate.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Relevance_Under_the_Income-tax_Act_2025\"><\/span><span style=\"color: #000080;\">Relevance Under the Income-tax Act, 2025<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Following the changes introduced in capital gains taxation, indexation is no longer universally available for all long-term capital assets. However, it continues to hold significance in specific cases.<\/p>\n<p>The revised cost inflation index is particularly relevant for Land and buildings acquired before 23 July 2024, Cases where indexation benefits remain available under the Income Tax Act, 2025, and resident individuals and HUFs eligible to choose between alternative LTCG tax regimes. For eligible property transactions, taxpayers may still be able to avail themselves of indexation benefits and reduce their taxable gains.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Choice_Between_20_with_Indexation_and_125_Without_Indexation\"><\/span><span style=\"color: #000080;\">Choice Between 20% with Indexation and 12.5% Without Indexation<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A significant relief available to eligible resident individuals and Hindu Undivided Families is the option to choose:<\/p>\n<ul>\n<li>Option 1: 20% Tax with Indexation: <span style=\"font-size: 16px;\">Compute capital gains after applying indexation benefit. and\u00a0Tax payable at 20%.<\/span><\/li>\n<li>Option 2: 12.5% Tax Without Indexation: <span style=\"font-size: 16px;\">No inflation adjustment available. and Tax payable at 12.5%.<\/span><\/li>\n<\/ul>\n<p>The optimal choice depends on factors such as Year of acquisition, original purchase cost, inflation-adjusted cost, sale consideration, and Holding period. For properties held for a long duration, indexation may significantly reduce the taxable gain, making the 20% regime more beneficial despite the higher tax rate.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Illustrative_Impact_of_cost_inflation_index\"><\/span><span style=\"color: #000080;\"><strong>Illustrative Impact of cost inflation index<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Consider a property purchased several years ago for INR 50 lakh and sold in TY 2026-27. With the revised cost inflation index of 384, the indexed cost may increase compared to calculations using the previous year&#8217;s index. The higher adjusted cost reduces taxable capital gains, which may ultimately lead to lower tax outgo under the indexation regime.<\/p>\n<p>Therefore, taxpayers should carefully compare Tax under 20% with indexation and Tax under 12.5% without indexation before finalizing their capital gains computation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trend_in_Recent_cost_inflation_index\"><\/span><span style=\"color: #000080;\">Trend in Recent cost inflation index<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Cost Inflation Index has steadily increased over the years:<\/p>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 192px;\" width=\"998\">\n<tbody>\n<tr>\n<th>Tax Year<\/th>\n<th>cost inflation index<\/th>\n<\/tr>\n<tr>\n<td>2022-23<\/td>\n<td>331<\/td>\n<\/tr>\n<tr>\n<td>2023-24<\/td>\n<td>348<\/td>\n<\/tr>\n<tr>\n<td>2024-25<\/td>\n<td>363<\/td>\n<\/tr>\n<tr>\n<td>2025-26<\/td>\n<td>376<\/td>\n<\/tr>\n<tr>\n<td>2026-27<\/td>\n<td>384<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>The upward trend reflects continued inflation adjustments and reinforces the importance of considering indexation benefits wherever available.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaway_for_Tax_Professionals\"><\/span><span style=\"color: #000080;\">Key Takeaway for Tax Professionals<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The notification of the cost inflation index at 384 for TY 2026-27 may appear to be a routine annual update, but it can have a direct impact on LTCG computations for eligible taxpayers. Taxpayers should:<\/p>\n<ul>\n<li>Use the revised cost inflation index of 384 for transfers taking place in TY 2026-27.<\/li>\n<li>Recompute indexed cost for eligible capital assets.<\/li>\n<li>Compare the tax impact under both LTCG regimes where the option is available.<\/li>\n<li>Advise clients selling legacy real estate holdings to evaluate whether the 20% tax with indexation or 12.5% tax without indexation results in a lower overall tax burden.<\/li>\n<\/ul>\n<p>The new cost inflation index of 384 reinforces the importance of accurate capital gains planning. For taxpayers selling eligible properties acquired before 23 July 2024, a simple comparison between the available tax computation methods could translate into significant tax savings. As always, a case-specific evaluation remains essential to identify the most beneficial tax treatment.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>CBDT Notifies Cost Inflation Index for TY 2026-27: What It Means for Property Owners and Taxpayers The Central Board of Direct Taxes (CBDT) has officially notified the Cost Inflation Index for Tax Year (TY) 2026-27 at 384, effective from 1 April 2026. This marks an increase from the previous year&#8217;s CII of 376, providing taxpayers &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1035],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/10539"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=10539"}],"version-history":[{"count":3,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/10539\/revisions"}],"predecessor-version":[{"id":10543,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/10539\/revisions\/10543"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=10539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=10539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=10539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}