Income Tax

CBDT waives demand for special rate tax for new tax regime up to 31.12.2025

CBDT waives demand raised up to 31.12.2025 of tax on income chargeable to tax at special rates where new tax regime had been opted. 

Order under section 119 of the Income-tax Act, 1961 for waiver of interest payable under section 220(2) due to late payment of demand, in certain cases.

The provisions of section 115BAC(1A) of the Income-tax Act, 1961 (‘the Act’) are subject to the other provisions of Chapter XII of the Act. Therefore, incomes chargeable to tax at special rates as specified under various provisions of Chapter XII of the Act are not included while determining the chargeability to tax under section 115BAC(1A) of the Act. Further, the clause (b) of proviso to section 87A is applicable to incomes chargeable to tax under section 115BAC(1A) of the Act.

It is noticed that in certain cases, the returns had already been processed and rebate was allowed under section 87A of the Act on incomes chargeable to tax at special rates. In such cases, rectifications have to be carried out to disallow such rebate, which has been incorrectly allowed. Such rectifications will result in demands getting raised. If the payments of such demands raised are delayed then the same are liable for charging of interest under section 220(2) of the Act.

Central Board of Direct Taxes has issued Circular No 13/2025 under section 119 of the Act, to direct that the interest payable under section 220(2) of the Act shall be waived in such cases where the payment of the demands raised, is made on or before 31.12.2025.

Download CBDT Circular No. 13/2025 Click Here >>

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