CBDT Issues Clarification on Capital Gains Taxation for Real Estate

The Central Board of Direct Taxes (CBDT) has released Circular No. 08/2026 to address persistent doubts regarding calculation rules for long-term capital gains (LTCG) on real estate transfers.

Key Clarifications

For properties acquired prior to April 1, 2001, taxpayers can compute fair market value based on certified registry rates of 2001. Indexation benefits will be computed using the Cost Inflation Index (CII) from 2001 onwards, ensuring fair calculations on inherited ancestral properties.

This provides substantial relief to individual taxpayers who previously faced disputable valuations during assessment proceedings.