@MS310 , Having read through your situation ( vis-a-vis indexation of basis in India in gain computation ), -- I think I have answered similar before :
For US tax purposes :
(a) you treat the sale of the asset as if the asset was in the USA / domestic and compute your capital gain tax.
(b) in the Deductions & Credit section/tab, you select foreign tax credit
(1) On form 1116 you enter the total foreign sourced income i.e. Asset sales price less sales expenses (including commissions, transfer tax, sales prep etc. etc. --- not the taxes paid to Govt. of India) LESS your Basis ( Original acquisition cost plus cost of improvements ). This should be the same as your gain on Schedule-D or 8949. This the amount that is being doubly taxed.
(2) On form 1116 you enter the total foreign taxes paid ( Collected at source ). Note that this amount should be the final tax amount ( otherwise you have to file an amended return to reconcile with the final amount ) .
Note that your foreign tax credit while recognized US$ for US$, the allowable amount for the tax year is based on a ratio of foreign source income to your world income -- the rest can be carried back one year ( again limited by the same ratio ) and forward till quenched
Does this help or do you need more info on this ? Is there more I can do for ypou ?
Namaste
pk
