circular no. 13 /2025 order under section 119 of tbe income tax act 1961 for waiver of interest payable under section 220 2 due to late payment of demand in certain cases · 19 Sept 2025

Circular No. 13/2025
F. No. 275/0912025-IT(Budget)
Governmen t ofIndia/(1-fRO "':en{""'q;"'"1 (")
Ministry of Finance! (fittr l4;tictll)
Department of Revenue/~ ~
Central Board of Direct Taxes/(~-snll Vt'll"alq;xoi\ij
New Delhi. I 11'September, 2025

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

The provisions of section 115BAC(1 A) 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(1 A) of the Act. Further, the clause (b) of proviso to section 87A is applicable to incomes chargeable to tax under section 115BAC(1 A) of the Act.

2. It is noticed that in certain cases, the returns had already been processed and rebate was allowed under section 87 A of the Act on incomes chargeable to tax at special rates. In such cases, rectifications havc 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.

3. In order to mitigate the genuine hardship arising to such taxpayers on account of interest payable under section 220(2) of the Act, the Central Board of Direct Taxes ('the Board'), in exercise of its powers conferred under section 119 of the Act, directs 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.

4. In such cases, if a taxpayer fails to pay the demand raised as a result of rectification order passed by the CPC on or before 31.12.2025, the interest shall be charged under section 220(2) of the Act from the day immediately following the end of the period mentioned in sub-section (I) of section 220 of the Act.

5. Hindi version shall follow.

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.
(Rajendra Kumar Meena)
Under Secretary, IT-Budget
CBDT
•

Copy to:-

1. The Chainnan & Members, CBDT
2. All Pr.CCsIT, CCsITI DGsIT.
3. All Joint Secretaries/CslT, CBDT.
4. Commissioner oflncome-tax (Media & TP) and official Spokesperson, CBDT, New Delhi.
5. ADG (PR, P&P) for necessary action.
6. JClT, Database Cell, with a request to upload the order on the website ww.irsofficersonIine.gov.in.
7. Web Manager, % DGIT(Systems) with request to upload on the departmental website of www.incometaxindia.gov.in.
8. The Institute of Chartered Accountants of India, LP Estate, New Delhi
9. All Chambers of Commerce.
10. Hindi Cell for translation.
11. The Guard File.

(Rajendra Kumar Meena)
Under Secretary, IT-Budget
CBDT