Capital Gains Tax Indexation: When it is Required?

Chaitra Seetharam | Last updated: 08 August 2025

Save Share

Quick Summary

Indexation is a tax benefit in India that adjusts the purchase price of long-term capital assets to account for inflation, thereby reducing taxable gains. Following the Union Budget 2024, indexation has been removed for most capital assets, with a flat 12.5% tax rate now applying to long-term capital gains. However, transitional provisions allow for indexation on land and buildings purchased before July 23, 2024, offering a choice between a 12.5% tax without indexation or a 20% tax with indexation to minimise tax liability.

Capital Gains Tax in India has seen major updates, especially with the Union Budget 2024. A key aspect in calculating these taxes—particularly for long-term capital gains (LTCG)—is the principle of "Indexation." Understanding this concept is essential for accurate tax computation. What is Indexa

Daily Limit Reached

You have reached your daily limit of 2 Free Articles

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?

No Ads
WhatsApp Broadcasts
Daily E-Newsletter
Unlimited Articles Access

BEST VALUE

2 YEAR PLAN

3,499

(Inclusive of GST)

1 YEAR PLAN

1,999

(Inclusive of GST)

View all CCI PRO benfits

Already a PRO member? Login here for an ad-free experience.

118 Views Comment Share Income Tax Report

About the Author

Chaitra Seetharam

Finance Professional

I write on Income Tax, TDS, ITR filing, banking rules, investment schemes, and financial law updates in India. My articles simplify complex tax provisions, compliance requirements, and policy changes to help taxpayers, professionals, senior citizens, and businesses stay informed and financially aware.

View Articles

Comments :

Capital Gains Tax Indexation: When it is Required?

You have reached your daily limit of 2 Free Articles

Why Upgrade to CCI PRO?

Chaitra Seetharam

Related Articles

Popular Articles

Trending Online Classes

Browse by Category