On 14th June, 2022, Central Board of Direct Taxes notified amendment in Notification S.O. 1790(E) of Income Tax Department, dated 5th June 2017. Effective from 1st April, 2023, this notification seeks to amend Cost Inflation Index (CII) for the Financial Year 2023-24.
With the insertion of serial number 22 in Table of the said Notification, the inflation rate has risen from 317 in the previous assessment year to ‘331’ for 2022-23.
Base year being 2001, the prices of goods and services have been largely affected by the rate at which the inflation index is rising making purchasing power of end users depleting at increasing rate. While government each year officially notifies the CII, it calculates the CII based on previous year rate and Base year.