Planning to Sell Property or Gold? This New Tax Update Could Matter More Than You Think

The Income Tax Department has raised the Cost Inflation Index (CII) to 384 for the financial year 2026-27 , providing taxpayers with the latest benchmark for calculating long-term capital gains (LTCG) on the sale of capital assets such as immovable property, securities and jewellery .

The revised index, notified by the Central Board of Direct Taxes (CBDT) , is an increase from 376 in FY2025-26 . The annual revision is intended to account for inflation while calculating the taxable gains earned from the sale of eligible long-term assets.

The Cost Inflation Index is an important tool under the Income-tax Act, 1961 , as it allows taxpayers to adjust the purchase price of an asset for inflation before calculating capital gains. By increasing the indexed cost of acquisition, the taxable gain can be determined more accurately, reflecting the erosion in the purchasing power of money over time.

According to tax experts, the annual notification offers certainty to taxpayers, valuers and tax professionals while reducing disputes related to the computation of indexed costs. Rajat Mohan , Managing Partner at AMRG Global , said the revision demonstrates the government's commitment to maintaining an objective inflation-adjustment mechanism wherever indexation benefits continue under the current tax framework.

To qualify as a long-term capital asset , an asset must generally be held for more than 36 months . However, the holding period is 24 months for immovable property and unlisted shares , while listed securities qualify after 12 months .

The revised CII of 384 will be used in eligible cases to calculate the inflation-adjusted purchase price of assets sold during FY2026-27 , helping determine the taxable long-term capital gains more accurately.

With the latest notification now in effect, taxpayers planning to sell eligible long-term assets during the current financial year can use the updated index while computing their tax liability, subject to the applicable provisions of the Income-tax Act.