India sets FY27 cost inflation index at 384, easing capital gains tax burden

The updated index lowers the tax liability on long-term property sales, providing relief to investors as global borrowing costs rise.

By Handelsavisen Newsroom · Automated 2026-07-16 13:26 UTC · 1 min read Last updated: 2026-07-16 18:22 UTC

The Indian government has set the Cost Inflation Index (CII) for the fiscal year 2027 at 384, a move that reduces the long-term capital gains tax liability for investors selling land and property.

The index serves as the statutory basis for adjusting the acquisition cost of capital assets for inflation, ensuring that tax is levied on real gains rather than nominal increases driven by price levels.

By raising the index to 384, the government effectively increases the inflation-adjusted cost base for assets held over the long term.

This results in a lower taxable gain for sellers, providing a direct tax benefit to individuals and entities disposing of real estate or other capital assets.

The adjustment is a routine annual update but carries significant implications for transaction costs in the property market.

The release comes as global interest rate trajectories shift upward, with forecasts indicating borrowing costs could rise by half a percentage point or more through 2028.