The Cost Inflation Index for 2026-27 Is 384. For an NRI Selling Property, It Changes Nothing

On 15 July 2026 the CBDT notified the Cost Inflation Index for the financial year 2026-27 at 384. The number made the tax headlines. If you are an NRI selling a flat in India, it does nothing for your capital-gains bill, and here is why.

The Cost Inflation Index is the government's yearly inflation yardstick. For decades it let a seller push up the recorded cost of an asset so that only the real gain, not the part caused by inflation, got taxed. That mechanism is called indexation. The CII is the multiplier it runs on.

What the CBDT notified

The Central Board of Direct Taxes issued Notification No. 85/2026 on 15 July 2026, setting the CII for FY 2026-27 at 384. It applies to the tax year 2026-27 from 1 April 2026 and to the years after. The Income Tax Department confirmed the number on its own channels the same week.

The last figure was 376, notified for FY 2025-26. So the index moved up about 2%. On paper, a higher index means a higher indexed cost and a smaller taxable gain. That is the benefit residents with older assets look for each July.

Why it does not reach an NRI's property gain

The Budget of July 2024 changed the capital-gains rules for immovable property. For any sale on or after 23 July 2024, long-term capital gains on property are taxed at 12.5% without indexation. The old 20%-with-indexation route was withdrawn.

There is one exception, and it is not yours. A resident individual or Hindu Undivided Family that bought the property before 23 July 2024 can choose the lower of two options: 12.5% without indexation, or 20% with indexation. That choice is where the CII still bites. Parliament did not extend that choice to non-residents. An NRI pays 12.5% without indexation on the gain, full stop, whatever the purchase date.

So for an NRI selling a flat in Mumbai, Pune, Bangalore, Hyderabad, Chennai, or Gurgaon this year, the gain is worked out on the actual cost you paid, not an inflated one. The CII of 384 is a key to a door you no longer stand at. We set out how the gain and the buyer's TDS actually work in capital gains tax on NRI property.

Where the number can still matter to you

Two narrow cases are worth naming, so you do not miss a real benefit:

This is a report on what the CBDT notified, not tax advice on your return. The rate, the form, and the lower-deduction certificate are the moving parts on a sale, and they are laid out in TDS on sale of property by an NRI. Run your own numbers with your accountant before you sign anything.

FAQ

What is the Cost Inflation Index for FY 2026-27? 384. The CBDT notified it through Notification No. 85/2026 dated 15 July 2026, up from 376 for FY 2025-26. It applies from 1 April 2026.

Can an NRI use indexation on a property sale in 2026? No. For property sold on or after 23 July 2024, an NRI pays 12.5% long-term capital-gains tax without indexation. The choice between 12.5% without indexation and 20% with indexation is open only to resident individuals and HUFs who bought before 23 July 2024.

Does the CII of 384 reduce my capital-gains tax at all? Not on an India property sale as an NRI. Your gain is computed on the actual cost of acquisition, and the flat 12.5% rate applies. The higher index helps sellers who are still allowed to index, which does not include non-residents on property.

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