CII Delay: Property Sellers Face Advance Tax Reckoning

The delayed release of the Cost Inflation Index for tax year 2026-27 creates a specific problem for property sellers who closed transactions between April 1 and June 15, 2026 and planned to use indexation to reduce their capital gains tax. The index, which sets the inflation adjustment factor for assets acquired before July 23, 2024, arrived after the first quarterly advance tax installment was due. Sellers who underpaid advance tax because they lacked the CII figure now face a gap.

The tax code requires advance tax to be paid in installments. Missing the first installment triggers interest under Section 234C of the Income Tax Act. Sellers in this window must recompute their liability using the newly released CII and pay the shortfall before the next installment date, typically September 15. Failure to do so compounds the interest charge.