Tax
Indexation lifts an old purchase price to today’s money using the cost inflation index, so only the real gain is taxed.
What you paid and what you sold for
Original cost of the asset, in your local currency.
What the asset sold for.
The cost inflation index, and the rate
Official index value for the year of purchase.
Official index value for the year of sale. In India the FY2025-26 CII is reported as about 376 — verify with the CBDT before relying on it.
Rate applied to the indexed gain (a placeholder to verify).
Indexed Capital Gain
0
Sale price minus the indexed cost.
Formula verified 12 September 2026
Indexed Cost of Acquisition
348,000
Cost scaled by the index ratio.
Tax with Indexation
0
Indexed gain multiplied by the long-term rate.
Educational estimate only — verify rates with your official tax authority. Read the full disclaimer ↓
Estimates only — not financial, tax, or professional advice.
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What it calculates: Indexed Capital Gain, Indexed Cost of Acquisition, Tax with Indexation.
Updated 5 June 2026 · Transparent assumptions
Indexed cost is the purchase price multiplied by the sale-year index over the purchase-year index. If the index ran from 200 to 350 across your holding period, a cost of 10,00,000 becomes 17,50,000, and only the amount above that is taxed.
The index numbers themselves have no meaning in isolation — only their ratio matters, so the base year they are anchored to is irrelevant as long as both come from the same notified series.
An asset held for fifteen years may double in price while prices generally rose 60%. Without indexation, the whole doubling is taxed, including the part that merely kept pace — which means being taxed on maintaining your position rather than improving it.
Indexation removes that portion from the charge. It is why an indexed long-term rate and an unindexed one are not comparable by their headline percentages: a lower unindexed rate can easily produce a larger bill on a long-held asset.
The benefit generally applies only to assets held beyond a specified long-term threshold, and only to asset classes the law names. Short-term gains are taxed on the plain difference with no index applied at all.
Several jurisdictions have narrowed or withdrawn indexation in recent years, sometimes with a choice between an indexed rate and a lower unindexed one. Where a choice exists, running both is the only way to know which is cheaper for your particular holding.
The calculation indexes a single purchase price. Capital improvements made in later years are indexed from the year each was incurred, not from the original purchase, so a property with a major renovation needs each cost indexed separately and summed.
Transfer costs, reinvestment exemptions that can eliminate the charge entirely, and any surcharge are not modelled. Check the index numbers against the official notification for the exact financial years involved before relying on the result.
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Tax disclaimer
Tax rules vary by country, state, tax year, filing status, income type, deductions, and exemptions. This calculator is educational and uses the values you enter. Always verify final tax treatment with official sources or a qualified tax professional.
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Published 12 September 2026