Last reviewed: 17 September 2026. The CBDT has notified the Cost Inflation Index for FY 2026-27 (Tax Year 2026-27) at 384, up from 376 last year. If you sell shares or mutual funds this year, this number will not feature in your tax computation at all — and that surprises most people who go looking for a "CII table" online. Indexation survives in only two corners of the law after the 23 July 2024 overhaul: a specific pre-23-July-2024 property comparison, and assets held since before 1 April 2001. Here is the notification, the full CII table, and exactly who still needs 384.
The notification, in brief
By Notification No. 85/2026-Income Tax dated 15 July 2026, the CBDT has fixed the Cost Inflation Index for the financial year 2026-27 (referred to as "Tax Year 2026-27" under the Income-tax Act, 2025) at 384. The index is issued each year under Section 72(8)(a) of the Income-tax Act, 2025 — the successor provision to Explanation (v) to Section 48 of the Income-tax Act, 1961, which performed the same role until FY 2025-26. The purpose has not changed with the new Act: CII adjusts the cost of acquisition or improvement of a capital asset for inflation, so that long-term capital gains tax falls on the real gain rather than the nominal, inflation-swollen gain. It takes effect for transfers made on or after 1 April 2026.
Cost Inflation Index table (base year 2001-02 = 100)
| Financial year | CII | Financial year | CII |
|---|---|---|---|
| 2001-02 (base) | 100 | 2023-24 | 348 |
| 2020-21 | 301 | 2024-25 | 363 |
| 2021-22 | 317 | 2025-26 | 376 |
| 2022-23 | 331 | 2026-27 | 384 |
The indexed cost of acquisition (or improvement) is computed as:
Indexed cost = Actual cost × (CII of year of sale ÷ CII of year of purchase, or FY 2001-02 if acquired earlier and FMV as on 1 April 2001 is substituted)
The 23 July 2024 watershed: why CII is now mostly academic
This is the part most CII articles skip. The Finance (No. 2) Act, 2024 (effective 23 July 2024), carried forward into the Income-tax Act, 2025, restructured how long-term capital gains are taxed and removed indexation for almost every asset class:
- Land or a building acquired on or after 23 July 2024: taxed at a flat 12.5%, with no indexation, for every category of seller.
- Land or a building acquired before 23 July 2024: a resident individual or HUF may compute tax both ways — 12.5% without indexation, and 20% with indexation using the CII for the year of sale — and pay whichever is lower. Non-residents, companies, firms and LLPs do not get this comparison on any property, regardless of purchase date; they pay 12.5% only. The full mechanics, TDS and Section 50C angles are in our property capital gains guide for FY 2025-26/2026-27.
- Every other capital asset — listed and unlisted shares, equity and debt mutual funds, gold, bonds — sold now is taxed under the uniform 12.5% no-indexation regime (with the Section 112A exemption of ₹1.25 lakh a year for listed equity/equity funds), with no indexation choice, no matter how old the holding is.
Net effect: outside two specific situations, the annual CII notification has become largely academic for anyone selling a capital asset today. It matters where the law still lets indexation into the computation, and nowhere else.
Who genuinely needs CII 384 this year
| Situation | Does CII 384 apply? |
|---|---|
| Resident individual/HUF selling land or building bought before 23 Jul 2024 | Yes — for the 20%-with-indexation comparison |
| Any seller of land or building bought on/after 23 Jul 2024 | No — flat 12.5%, no indexation |
| NRI/OCI selling any property, any purchase date | No — flat 12.5% only; see our NRI property sale & TDS guide for their computation |
| Company, firm or LLP selling property, any purchase date | No — flat 12.5% only |
| Asset (of any kind) acquired before 1 April 2001 | Yes — to index the substituted 1 April 2001 fair market value forward to the year of sale |
| Listed shares, equity/debt mutual funds, gold, bonds — sold now | No — uniform 12.5% regime, no indexation regardless of holding period |
Worked example 1: older property, modest appreciation — indexation wins
A resident individual bought a flat in FY 2020-21 (CII 301) for ₹60,00,000, before 23 July 2024. He sells it in FY 2026-27 (CII 384) for ₹95,00,000, net of transfer expenses.
| Computation | Route A: 12.5% flat | Route B: 20% with indexation |
|---|---|---|
| Cost taken | ₹60,00,000 | ₹60,00,000 × 384/301 = ₹76,53,821 |
| Long-term capital gain | ₹35,00,000 | ₹18,46,179 |
| Tax before surcharge/cess | ₹4,37,500 | ₹3,69,236 |
Route B (indexation) is lower by about ₹68,264, so he elects the 20%-with-indexation route. The purchase-to-sale appreciation here (about 1.58×) is close to the inflation adjustment (1.28×), which is the pattern where indexation tends to help.
Worked example 2: sharp appreciation — the flat rate wins
A resident individual bought a plot in FY 2022-23 (CII 331) for ₹40,00,000, before 23 July 2024. She sells it in FY 2026-27 (CII 384) for ₹90,00,000.
| Computation | Route A: 12.5% flat | Route B: 20% with indexation |
|---|---|---|
| Cost taken | ₹40,00,000 | ₹40,00,000 × 384/331 = ₹46,40,483 |
| Long-term capital gain | ₹50,00,000 | ₹43,59,517 |
| Tax before surcharge/cess | ₹6,25,000 | ₹8,71,903 |
Here the flat 12.5% route is lower by about ₹2,46,903. The plot appreciated 2.25× over four years — well ahead of the roughly 1.16× inflation adjustment — which is exactly the pattern where indexation stops helping. The rule: never assume either route is better; compute both every time using the current year's CII. Either way, reinvesting the gain under Sections 54/54F/54EC can reduce or eliminate the tax further — see our Section 54 vs 54F exemption guide.
Common mistakes we see
- Applying the current year's CII to a mutual fund or listed-share sale — indexation does not apply there at all under the post-23 July 2024 regime.
- Treating the pre-23-July-2024 property comparison as automatic for NRIs or for a company/LLP seller — it is available only to resident individuals and HUFs.
- Forgetting that Schedule CG in ITR-2/ITR-3 needs the indexation columns filled in for the software to actually run the comparison and pick the lower tax.
- Using the wrong CII year for the year of improvement — improvement costs are indexed from the year the money was actually spent, not the year of original purchase.
- Assuming a pre-2001 asset gets an automatic uplift — the fair market value as on 1 April 2001 has to be supported (typically by a registered valuer's report), and is capped at the stamp duty value on that date.
Frequently asked questions
What is the Cost Inflation Index for FY 2026-27?
The CBDT has notified the Cost Inflation Index (CII) for FY 2026-27 (Tax Year 2026-27 under the Income-tax Act, 2025) as 384, vide Notification No. 85/2026-Income Tax dated 15 July 2026. It applies to transfers made on or after 1 April 2026.
How does this compare with last year?
CII for FY 2025-26 was 376. The rise to 384 continues the annual notification under Section 72(8)(a) of the Income-tax Act, 2025 (successor to Explanation (v) to Section 48 of the 1961 Act), on the 2001-02 = 100 base.
Does CII 384 help everyone selling a capital asset this year?
No, and this is the most misunderstood point. Since the Finance (No. 2) Act, 2024, most long-term capital gains — listed and unlisted shares, equity and debt mutual funds, gold, and any land or building acquired on or after 23 July 2024 — are taxed at a flat 12.5% with no indexation at all. CII 384 is relevant mainly to two narrower situations, explained below.
I am a resident individual selling a flat bought in 2015. Do I get indexation?
Yes. For land or a building acquired before 23 July 2024, a resident individual or HUF can compute tax both ways — 12.5% without indexation, and 20% with indexation using CII 384 — and pay whichever is lower. NRIs, companies, firms and LLPs do not get this comparison; they pay 12.5% only, regardless of when the property was bought.
What if my property was bought before 1 April 2001?
You may substitute the fair market value as on 1 April 2001 (capped at the stamp duty value on that date) for actual cost, and then index that substituted value forward using CII 384 for a FY 2026-27 sale — again, only within the pre-23 July 2024 property comparison described above. A registered valuer's report anchored to 1 April 2001 is the usual supporting document.
Do listed shares and mutual funds bought years ago get indexation now?
No. Long-term capital gains on listed equity shares, equity mutual funds, unlisted shares, debt funds and gold sold now are taxed at 12.5% (with the ₹1.25 lakh annual exemption for listed equity/equity funds under Section 112A) without any indexation, irrespective of how long ago the asset was purchased. CII 384 does not enter this computation at all.
Is 20%-with-indexation always cheaper than 12.5% flat?
No — it depends on how much the asset has appreciated relative to inflation. Where the sale price has merely kept pace with inflation over a long holding, indexation usually wins. Where the price has risen sharply faster than inflation, the flat 12.5% route is usually cheaper. Both worked examples below show this pattern; always compute both before filing.
We run both computations where the law allows a choice, apply the correct regime for your asset and acquisition date, and file a well-documented return — for residents and NRIs alike.
Income Tax Filing Capital Gains & Tax Advisory Talk to usThis article summarises the Cost Inflation Index notification and the applicable law as on 17 September 2026, for general education and not as an opinion on any specific transaction. Whether indexation is available, and which computation route is lower, depends on the asset, acquisition date, residential status and full facts of your case. Please take professional advice before filing.