The Central Board of Direct Taxes (CBDT) has notified ‘376’ as the Cost Inflation Index (CII) for the Financial Year 2025-26, via [Notification No. 49/2025, dated 28.06.2025].
🔍 What is CII?
The Cost Inflation Index helps taxpayers calculate the indexed cost of acquisition for capital assets, which in turn allows for inflation-adjusted capital gains calculations. This is especially beneficial for long-term capital asset transfers, as it increases the cost base and reduces the taxable capital gains.
⚠️ Important Amendment – Effective 23 July 2024
As per the latest amendments to the Income Tax Act:
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The benefit of indexation is no longer available for any capital asset transferred on or after 23.07.2024,
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Exception: This applies only if the asset is land or building acquired before 23.07.2024 and the seller is a resident individual or resident HUF.
📌 Why it matters?
This move will significantly impact tax planning for capital assets sold after the cut-off date. Taxpayers must now carefully consider the acquisition date and asset type when calculating capital gains.
