Indexation calculator
Indexation calculator: the calculator below opens with the property card selected. Type the purchase and the sale, and it restates the old cost in current rupees using the notified cost inflation index, computes the gain both ways the law allows, and applies whichever branch taxes less.
Indexation exists so that inflation is not taxed as profit. A plot bought in 2012 did not really cost today what it cost then, and the cost inflation index, notified by the CBDT year by year, is the official conversion between the two rupees. Since the Finance (No. 2) Act 2024 the right to use it has depended on when the property was acquired, and this page maps exactly who still gets it.
The mechanism
How the cost inflation index works
One formula does everything: indexed cost equals original cost multiplied by the index of the sale year divided by the index of the purchase year. Both values come from the same notified series, anchored at the 2001-02 base year of 100. Both are read by financial year, April to March, so a purchase dated June 2012 falls in 2012-13 and a sale dated September 2026 in 2026-27.
The notified series runs through 363 for 2024-25, 376 for 2025-26 and 384 for 2026-27, the last set by CBDT notification 85/2026. A sale in a year the CBDT has not yet notified has no index to read, so the calculator applies the flat rate and flags the sale in its checklist. Indexation also only ever shrinks a gain; it never manufactures a loss.
Notified cost inflation index, selected years
| Financial year | Index |
|---|---|
| 2001-02 | 100 |
| 2012-13 | 200 |
| 2023-24 | 348 |
| 2024-25 | 363 |
| 2025-26 | 376 |
| 2026-27 | 384 |
The 23 July 2024 line
Who still gets indexation
The changeover cut indexation out of the general rate but kept it as an election for one group. Land or buildings acquired before 2024-07-23 and transferred on or after that date choose between two treatments: 12.5% on the unindexed gain, or 20% on the indexed gain, under the proviso to section 112. The calculator computes both and applies the lower tax unless you pin the election yourself.
Every other situation is settled by the same date. A transfer before 2024-07-23 kept the old regime: long-term assets paid 20% with indexation, and 36 months of holding made property long-term. Property acquired on or after 2024-07-23 gets 12.5% flat, with no indexation and no choice. And the election only exists for long-term sales, which need 24 months of holding on the transfer-date rule the calculator applies.
- Bought before 2024-07-23, sold on or after it: the 12.5% flat and 20% indexed branches side by side, lower one applied.
- Bought and sold before 2024-07-23: 20% with indexation, the pre-change regime.
- Bought on or after 2024-07-23: 12.5% flat, no indexation, whatever the sale date.
- Improvements: section 48 indexes each cost of improvement from the index of the financial year it was made in, not the purchase year, and section 55(1)(b) drops improvements made before 1 April 2001 from the cost altogether. Enter the date of the improvements in the calculator and it indexes them from that year.
- Bought before 1 April 2001: section 55 lets you take the fair market value on that date as the cost, and section 48 indexes it from the 2001-02 base year of 100. The calculator asks for that value and uses it when it is higher than the price paid.
Worked example
A plot held 170 months: indexation saves ₹30,500
A plot bought on 15 June 2012 for ₹20,00,000 and sold on 10 September 2026 for ₹65,00,000. Held 170 months, it is long-term many times over, and the 2012 acquisition keeps the election.
The index of 2012-13 is 200 and of 2026-27 is 384, so the factor is 384 over 200, or 1.92. The indexed cost is ₹38,40,000 and the indexed gain ₹26,60,000. On the flat branch the whole ₹45,00,000 is the gain.
The 20% indexed branch taxes ₹26,60,000 into ₹5,32,000. The 12.5% flat branch taxes ₹45,00,000 into ₹5,62,500. Indexation wins by ₹30,500, so the calculator applies it: tax of ₹5,32,000, then the 4% health and education cess of ₹21,280, for ₹5,53,280.
The 2012-13 plot sold in 2026-27, both branches
| Step | Flat branch | Indexed branch |
|---|---|---|
| Sale price | ₹65,00,000 | ₹65,00,000 |
| Cost | ₹20,00,000 | ₹20,00,000 indexed to ₹38,40,000 |
| Gain | ₹45,00,000 | ₹26,60,000 |
| Rate | 12.5% | 20% |
| Tax on the gain | ₹5,62,500 | ₹5,32,000 |
| With 4% cess | ₹5,85,000 | ₹5,53,280 |
Questions
Frequently asked questions
What is the cost inflation index?
A table of conversion factors the CBDT notifies under section 48, anchored at the 2001-02 base year of 100. Each financial year gets one value; the latest are 376 for 2025-26 and 384 for 2026-27.
How do I calculate the indexed cost of acquisition?
Take the cost, multiply by the index of the financial year of the sale, and divide by the index of the financial year of the purchase. In the example above, ₹20,00,000 times 384 over 200 gives ₹38,40,000.
Who can claim indexation after the 2024 change?
Land or buildings acquired before 2024-07-23 and sold on or after it. They keep a choice between 12.5% without indexation and 20% with it. Property bought later gets 12.5% with no election.
Can property bought after 23 July 2024 be indexed?
No. Acquisitions from that date pay 12.5% on the unindexed gain however long the property is held. The 20% indexed rate exists only for the pre-change acquisitions that sold after the change.
What happens if I bought before 1 April 2001?
Section 55 lets you use the property's fair market value on 1 April 2001 as its cost instead of the price you paid, and section 48 indexes that cost from the 2001-02 base year of 100, not from the year you bought. Enter the value in the calculator's market value field and it takes whichever cost is higher, then indexes from 2001-02.
Which branch wins, 12.5% flat or 20% indexed?
Whichever taxes less, and that turns on how old the purchase is. A big index ratio, like the 1.92 of the 2012 plot above, can absorb enough gain to beat the lower flat rate. A purchase from 2018 or later usually stays flat.
Sources
Where these figures come from
Also on capitalgainstax.net