The inflation index for this year is 384. Here is what that means for your sale
Every year the tax department publishes one number that quietly decides how much tax property sellers pay. For the year 2026 to 2027 that number is 384. Here is what it does for you.
One number, explained without jargon
Prices rise every year. A flat bought for ten lakh rupees in 2005 did not really cost ten lakh in today's money. The Cost Inflation Index is the government's official way of admitting that.
The index started at 100 for the year 2001 to 2002. For the current year it stands at 384. That means the government accepts that prices today are 3.84 times what they were in 2001.
How it cuts your tax
When you sell a property, tax is charged on your profit. The index lets you inflate your purchase cost before the profit is worked out, so you are not taxed on growth that was only inflation.
A simple example. You bought a flat for 12 lakh in 2001. You sell it this year for one crore. Without the index, your taxable profit looks like 88 lakh. With it, your cost becomes 12 lakh times 3.84, which is about 46 lakh. Your taxable profit drops to about 54 lakh. Same flat, same sale, hugely different tax.
Where a valuer comes in
The index can only multiply the cost you can prove. If your property was bought before April 2001, the law lets you replace the old purchase price with its market value on 1 April 2001. That is a certified valuation, and it is exactly what we do. The bigger the starting value you can prove, the more the index works in your favour.
Recent law changes also give some sellers a choice between two ways of computing the tax. Which one suits you is your chartered accountant's call. Either way, the computation starts from a cost figure that can stand scrutiny.
What to do if you are selling this year
- Find your purchase papers, whatever exists. Missing papers are common and fixable.
- If the property came to you before April 2001, get the 2001 value certified before you file.
- Give your CA the certificate and let them run both computations.
Try our free capital gains calculator to see your own numbers, or call us and we will walk through it with you.
Checked by Parish Rao, Chartered Engineer and Government Approved Valuer.
Page last checked on 23 August 2026.
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