New Delhi, Jul 16 (PTI) The income tax department has increased the Cost Inflation Index for the current fiscal for calculating long-term capital gains arising from the sale of immovable property, securities and jewellery.

The Cost Inflation Index (CII) is used by taxpayers to calculate gains from the sale of capital assets after adjusting inflation.

The Cost Inflation Index for FY 2026-27 is 384, as per a notification of the Central Board of Direct Taxes (CBDT).

The CII for fiscal 2025-26 was 376.

AMRG Global Managing Partner Rajat Mohan said the annual notification of the Cost Inflation Index reflects the government's commitment to maintaining an objective inflation-adjustment mechanism wherever indexation benefits continue under the new tax framework.

It provides taxpayers, valuers and tax professionals with clarity for computing the indexed cost and reduces interpretational disputes, Mohan added.

CII or Cost Inflation Index is notified under the Income-tax Act, 1961 every year. It is popularly used to calculate "indexed cost of acquisition" while calculating capital gains at the time of sale of any capital asset.

Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as 'long-term capital gains'.

Since the prices of goods increase over time resulting in a fall in the purchasing power, the CII is used to determine the inflation-adjusted purchasing price of assets so as to compute taxable long-term capital gains (LTCG). PTI JD DR DR

Cost Inflation Index enables inflation-adjusted long-term capital gains calculations through indexed acquisition cost for eligible capital asset transfers. The Cost Inflation Index for financial year 2026-27 is 384 for computing inflation-adjusted long-term capital gains on transfers of capital assets, including immovable property, securities and jewellery. It is used to determine indexed cost of acquisition by adjusting purchase cost for inflation. Long-term classification generally requires holding exceeding 36 months, with stated periods of 24 months for immovable property and unlisted shares and 12 months for listed securities.