Indexation was a method that allowed you to adjust an asset's original purchase price upward for inflation before calculating your taxable capital gain, using an official inflation index published by the government each year. The logic was fair: if you bought something years ago and prices in general have risen a lot since then, part of your ‘gain’ on paper is really just inflation, not real profit, so it shouldn't be taxed as if it were.
This benefit was largely removed for transactions happening after July 2024, meaning for most assets sold after that date, capital gains are now calculated on the actual purchase price without any inflation adjustment, though tax rates were also revised at the same time as part of the same change. If you're dealing with an asset purchased and sold around that transition period, it's worth double-checking the current applicable rules, since some exceptions and grandfathering provisions may apply.