Indexation

Indexation historically let you inflate an asset's original purchase price using a government-published inflation index before calculating capital gains, shrinking the taxable gain to reflect that a rupee back then was worth more than a rupee now. The July 2024 Budget removed this benefit broadly in exchange for lower headline LTCG rates - but after pushback, restored a specific option for immovable property bought before 23 July 2024: taxpayers can choose between 20% tax with indexation, or 12.5% without it, whichever works out lower. Property bought after that date, and most other asset classes, no longer have an indexation option at all.

(Checked as of September 2026 - this has been a genuinely back-and-forth area of tax policy, so worth confirming the current rule before a real property sale.)