Indexed Cost of Acquisition (CII)
Adjust your purchase cost for inflation using the Cost Inflation Index — get your indexed cost, indexed long-term capital gain and LTCG tax instantly.
Indexation breakdown
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Disclaimer: Indicative estimate. Indexation was withdrawn for most transfers on or after 23 July 2024. LTCG tax shown at 20% with indexation applies only where the taxpayer opts for it (land & building acquired before 23 July 2024). Actual tax may vary with exemptions under Sec 54/54F/54EC and surcharge/cess.
What is the Cost Inflation Index & indexation
Prices rise over time, so the ₹10 lakh you paid for a property a decade ago is not comparable to today's rupees. Indexation uplifts your original purchase cost by the inflation between the year you bought and the year you sold, using the government-notified Cost Inflation Index (CII). This higher "indexed cost of acquisition" is subtracted from your sale value, so you are taxed only on the real gain — not the part that is merely inflation.
Why it matters
The CII is notified every financial year by the CBDT (Central Board of Direct Taxes) with FY 2001-02 as the base year = 100. A higher indexed cost means a lower taxable long-term capital gain, and therefore lower tax.
The formula
Cost of improvement is indexed separately using the CII of the year the improvement was made.
Important — indexation was removed from 23 July 2024
The Finance (No. 2) Act, 2024 withdrew indexation for most assets transferred on or after 23 July 2024. Long-term capital gains are now generally taxed at a flat 12.5% without indexation (down from 20% with indexation).
The grandfathering choice for property
For land or building acquired before 23 July 2024, a resident individual/HUF may choose the lower of two options: 20% with indexation (old method) or 12.5% without indexation (new method). This calculator shows the 20%-with-indexation figure so you can compare it against the flat 12.5%. For assets bought on or after 23 July 2024, indexation is no longer available.
Worked example
A property bought in 2010-11 for ₹10,00,000 and sold in 2024-25:
So instead of taxing the gain over ₹10,00,000, the taxpayer is taxed only on the gain over the inflation-adjusted ₹21,73,653 — a materially lower long-term capital gain.
Cost Inflation Index table (2001-02 to 2025-26)
CBDT-notified CII with base year FY 2001-02 = 100. Use the index of the year you purchased and the year you sold in the formula above.
| Financial Year | CII |
|---|---|
| 2001-02 (base) | 100 |
| 2002-03 | 105 |
| 2003-04 | 109 |
| 2004-05 | 113 |
| 2005-06 | 117 |
| 2006-07 | 122 |
| 2007-08 | 129 |
| 2008-09 | 137 |
| 2009-10 | 148 |
| 2010-11 | 167 |
| 2011-12 | 184 |
| 2012-13 | 200 |
| 2013-14 | 220 |
| Financial Year | CII |
|---|---|
| 2014-15 | 240 |
| 2015-16 | 254 |
| 2016-17 | 264 |
| 2017-18 | 272 |
| 2018-19 | 280 |
| 2019-20 | 289 |
| 2020-21 | 301 |
| 2021-22 | 317 |
| 2022-23 | 331 |
| 2023-24 | 348 |
| 2024-25 | 363 |
| 2025-26 | 376 |
Key terms explained
Cost of acquisition
The price you originally paid to buy the asset, including stamp duty, registration and brokerage. For pre-2001 assets you may use the fair market value as on 1 April 2001 instead.
Cost of improvement
Capital expenditure that adds to the asset (e.g. constructing an extra floor). It is indexed separately using the CII of the year the improvement was actually made.
Long-term capital gain
Gain on assets held beyond the specified period (24 months for immovable property, 12/24 months for others). Only long-term gains qualified for indexation under the old rules.
LTCG tax with indexation
Where available, long-term gains on land & building are taxed at 20% plus surcharge and 4% cess after indexation — compare this against the flat 12.5% without indexation.
What is indexed cost of acquisition?
The original purchase cost adjusted for inflation using the Cost Inflation Index: cost × CII of the year of transfer ÷ CII of the year of acquisition. It reduces the taxable gain to the real, inflation-adjusted gain.
Is indexation still allowed?
For most assets transferred on or after 23 July 2024, no — long-term gains are taxed at a flat 12.5% without indexation. A resident individual or HUF selling land or a building acquired before that date may compute tax the old way at 20% with indexation if it works out lower.
What if I bought the asset before April 2001?
You may substitute its fair market value as on 1 April 2001 for the actual cost, capped at the stamp duty value on that date for land and buildings, and index from 2001-02 whose CII is 100.
Can improvement expenditure be indexed?
Yes, each item separately from the year in which it was incurred. Routine repairs and maintenance are not cost of improvement — only expenditure of a capital nature that adds to the asset counts.
Does indexation apply to inherited property?
The cost is that of the previous owner, and the courts have generally held that indexation runs from the year the previous owner acquired it, not the year of inheritance — though the department has at times contested this.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.