CBDT, in exercise of its powers conferred by clause (v) of the
Explanation to section 48 of the Income Tax Act, 1961 ('the
Act'), vide Notification No. 70/2025 dated 1st July, 2025
notifies the cost inflation index for FY 2025-26.
As per the notification, the cost inflation index
('CII") of '376' has been prescribed for FY
2025-26. The notification shall come into force on April 1, 2026
and shall apply to the AY 2026-27 and subsequent years.
The CII prescribed by the CBDT is relevant for the purpose of
computing income under the head Capital Gain chargeable to tax as
per the provisions of the Act.
Prior to Finance (No. 2) Act, 2024, the CII was required to
determine the indexed cost of acquisition/ improvement of a
long-term capital asset, as per the 2nd proviso to
section 48 of the Act, for computing the Long-term capital gain
arising from transfer of such long-term capital asset during the
Assessment Year. However, post application of Finance (No. 2)
