Property Indexation Calculator — 12.5% or 20% With Indexation (Tax Year 2026-27)
For land or buildings sold in tax year 2026-27. Resident individuals and HUFs who acquired the property before 23 July 2024 pay the lower of 12.5% without indexation and 20% with indexation. This calculator works out both.
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How section 197(3) works
- Default. Long-term capital gains on land or buildings are taxed at 12.5% without indexation (section 197(1)). Property held for more than 24 months is long-term (section 2(101)).
- The alternative. For a resident individual or HUF transferring land or a building acquired before 23 July 2024, section 197(3) ignores the excess of the 12.5% tax over tax computed at 20% on the gain using indexed cost. In effect you pay the lower figure.
- Indexed cost. Cost × CII of the year of sale ÷ CII of the first year the asset was held or 2001-02, whichever is later. Improvements are indexed from the year they were made (section 72(8)). For property acquired before 1 April 2001, you may use its fair market value on that date, capped at its stamp duty value then (section 90(9) and (10)); improvements before that date are ignored.
- Stamp duty value. If the stamp duty value on sale is more than 110% of the price, it replaces the price (section 78).
Cost Inflation Index
Values notified by CBDT, most recently in Notification No. 85/2026 dated 15 July 2026 for tax year 2026-27.
| Year | CII | Year | CII |
|---|---|---|---|
| 2001-02 | 100 | 2014-15 | 240 |
| 2002-03 | 105 | 2015-16 | 254 |
| 2003-04 | 109 | 2016-17 | 264 |
| 2004-05 | 113 | 2017-18 | 272 |
| 2005-06 | 117 | 2018-19 | 280 |
| 2006-07 | 122 | 2019-20 | 289 |
| 2007-08 | 129 | 2020-21 | 301 |
| 2008-09 | 137 | 2021-22 | 317 |
| 2009-10 | 148 | 2022-23 | 331 |
| 2010-11 | 167 | 2023-24 | 348 |
| 2011-12 | 184 | 2024-25 | 363 |
| 2012-13 | 200 | 2025-26 | 376 |
| 2013-14 | 220 | 2026-27 | 384 |
Assumptions and limits
- Only sales between 1 April 2026 and 31 March 2027 are covered.
- Your other income already exceeds the basic exemption limit.
- Exemptions under sections 82, 85 and 86 (earlier 54, 54EC and 54F) are not applied; see capital gains on selling property.
- For inherited or gifted property, the holding period includes the previous owner’s (section 2(101)(c)). The Act indexes from the first year the asset was held by the assessee; how that applies to inherited property is not settled in the text, so enter the date you consider correct and check it.
- For property acquired before 1 April 2001, the higher of actual cost and fair market value (as capped) is used, since the choice is yours.
- A loss is shown as computed without indexation, which is the figure used for set-off and carry forward.
Frequently asked questions
Who can choose indexation on property in tax year 2026-27?
A resident individual or HUF selling land or a building acquired before 23 July 2024. Everyone else pays 12.5% without indexation.
What is the Cost Inflation Index for 2026-27?
384, notified by CBDT Notification No. 85/2026.
Which option is usually better?
Indexation tends to help where the price has risen modestly compared with inflation, which is often the case for older purchases. Where the price has risen fast, 12.5% on the unindexed gain is often lower. The calculator computes both.
Does the stamp duty value affect the gain?
Yes. If the stamp duty value exceeds 110% of the sale price, the stamp duty value is treated as the sale consideration.
Is TDS deducted on a property sale?
Yes. The buyer deducts 1% of the higher of price and stamp duty value where either is ₹50 lakh or more, under section 393(1). It is credited against your tax.
Sources
Income-tax Act, 2025, sections 2(101), 72, 78, 90 and 197, Gazette of India, 21 August 2025. CBDT Notification No. 85/2026, 15 July 2026, and the Cost Inflation Index table on the Income Tax Department website.
General educational tool for tax year 2026-27, not tax advice. Confirm dates, costs and stamp duty values from your documents.
The concept behind the number
This calculator gives you a figure. These pages explain the rules behind it and work through the decisions.