The Central Board of Direct Taxes (CBDT) has issued a notification setting the cost inflation index at 384 for the financial year 2026-27, applicable from April 1, 2026.
CBDT Announces Cost Inflation Index at 384 for FY 2026-27
The Central Board of Direct Taxes (CBDT) has officially set the cost inflation index at 384 for the financial year 2026-27, effective from April 1, 2026. This measure is crucial for calculating long-term capital gains tax and key in determining the adjusted acquisition cost for tax purposes.
The index, which is adjusted annually, impacts taxpayers as it informs the inflation adjustments that can be applied to the sale value of assets, especially real estate and securities. Investors and taxpayers must factor this index into their financial planning and tax compliance strategies moving forward.
By establishing this index, the CBDT aims to provide a framework allowing taxpayers to accurately calculate their tax liabilities amidst changing economic conditions. The index serves as a barometer for tax adjustments over the fiscal year, influencing various financial decisions.
“The notification applies from April 1, 2026, for the tax year 2026-27 and subsequent years,” the CBDT stated.
For tax practitioners, this update is critical for advising clients on capital gains tax and the adjustment of cost. Professionals must ensure that clients are aware of these changes and how they may affect their tax liabilities.
Citations
- CBDT Notification No. 123/2026
