Introduction
Welcome back to Manika TaxWise, your go‑to finance blog breaking down complex tax updates into easy-to-understand insights. This week (30 June–6 July 2025) saw several significant notifications and circulars from CBDT, GST authorities, and the Ministry of Finance. We'll explore the Cost Inflation Index update, interest waiver clarifications, GST exempt rulings, and more. Whether you're a tax professional, business owner, or enthusiast, this detailed walkthrough delivers actionable takeaways. Let’s dive in!
🧾 Income-Tax Notifications & Circulars
1. Cost Inflation Index (CII) for FY 2025‑26: Index Set at 376
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Notification No. 70/2025 (1 July 2025) sets CII at 376, up from 363 in 2024‑25
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Why it matters: Used to calculate long-term capital gains for assets acquired before April 2025. This may slightly reduce tax liability for capital gain realizations.
Financial Year | CII |
|---|---|
| 2024–25 | 363 |
| 2025–26 | 376 |
| % Change | +3.6% |
Tip: When selling real estate or equity mutual funds held long term, recalculate your indexed cost. This new CII may trim your tax burden.
2. CBDT Circular 08/2025: Retroactive Interest Waiver Clarity
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Issued on 1 July 2025, it clarifies that CCIT/DGIT/Pr.CCIT can approve interest waivers under Sections 201(1A)(ii) & 206C(7) retroactively from 28 March 2025
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Taxpayers can apply within one year from the financial year's end. So interest for FY 2023‑24 can be waived by filing before 31 March 2025.
Practical Example:
A taxpayer faced interest liability under Section 201 for FY 2023‑24. Thanks to this circular, even if interest was imposed in April 2025, they can apply through the proper authority and potentially eliminate this charge.
3. ITR Filing Extension for AY 2025‑26
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CBDT extended the ITR filing deadline from 31 July to 15 September 2025 for certain taxpayers, including those under Explanation 2(c), via Circular 06/2025 (27 May 2025) and Press Release
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Who qualifies: Salaried individuals, professionals, business entities under specified limit—refer Section 139(1)(c).
Tip: Use this extension wisely—review deductions, rebates, and disclosures thoroughly.
🧂 GST Updates
AAAR Tamil Nadu: School Bus Services Not Exempt
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In the case of Batcha Noorjahan, AAAR TN ruled that transport of students does not qualify as supplies to educational institutions; thus, GST exemption denied
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Impact: School bus operators must charge GST at standard rates on student transportation.
Practical Tip: If your business includes school transport, update billing and GST compliance accordingly.
🌐 Customs & Other Circulars
No major customs duty changes or import/export reforms were issued this week. However, monitoring of tariff updates continues via the Ministry of Finance and CBIC.
✅ Summary of Key Actions
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Update CII to 376 when filing capital gains for AY 2026‑27.
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Advise clients / apply for interest waivers under Sections 201/206C via authorities within their jurisdiction.
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Reminder: ITR deadline now 15 Sept 2025—start early.
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Transport operators: Ensure GST compliance on school bus services.
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Stay alert: Watch for customs and fiscal policy circulars next week.
💬 Real‑Life Example: Capital Gains Tax Calculation
Suppose Raj sells his house in April 2026:
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Purchase cost (2005): ₹20 lakh
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Sale value: ₹80 lakh
Indexed cost:
20,00,000 × (376/117) ≈ ₹64.27 lakh
Taxable gain: ≈ ₹15.73 lakh
Compared with previous CII (363): ₹65.65 lakh indexed cost → ₹14.35 lakh gain.
➡ With revised CII, taxable gain increases slightly—plan your sale accordingly.
🧩 Why These Updates Matter for You
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CII update directly affects long-term capital gains: don't miss it in your tax computations.
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Interest waiver extension simplifies relief for taxpayers who defaulted on TDS/TCS compliance.
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Filing due date extension offers breathing room—perfect time to confirm deductions & disclosures.
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GST clarity prevents mistakes in services related to educational transport.
📝 Conclusion
Week ending 6 July 2025 brought several important shifts in Indian tax law—from CII update and interest waiver clarity to extended ITR deadlines and GST rulings. These may seem dry but can impact how much you pay or save. Stay ahead, adjust your practices, and empower your clients with accurate, compliant information.
At Manika TaxWise, we’ll continue tracking every major finance update so you're always informed. Share this article with colleagues, bookmark for quick reference, and see you next week!
🔍 FAQs
1. What is the new CII for FY 2025‑26?
CII is now 376, up from 363 last year; used for calculating indexed capital gains
2. Who can grant interest waivers under Sections 201 & 206C?
Designated authorities—CCIT, DGIT, Pr.CCIT—can approve waivers retroactively from 28 March 2025
3. When is the last date to file ITR for AY 2025‑26?
Extended to 15 September 2025 for eligible taxpayers
4. Are school bus services GST exempt?
No. AAAR Tamil Nadu has clarified that transporting students for schools is taxable taxguru.in.
5. Should I revisit capital gains calculations with the new CII?
Yes, especially if you sold assets after 1 April 2026. Adjust your indexed cost basis accordingly.
Keywords: Cost Inflation Index 376, CBDT Circular 08/2025, ITR extension September 2025, GST school transport ruling, interest waiver TDS/TCS.
