Quick Summary
The Central Board of Direct Taxes (CBDT) has issued Circular No. 13/2025 dated September 19, 2025, granting relief to taxpayers affected by additional demands raised due to rectifications in income tax returns. The issue arises under section 115BAC(1A) of the Income-tax Act, 1961, which governs the new tax regime. Incomes chargeable at special rates under Chapter XII are excluded when determining liability, and rebates under section 87A apply only to regular incomes under this section. However
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FAQ :
The CBDT has waived the interest payable under section 220(2) for taxpayers affected by additional demands raised due to rectifications in their income tax returns concerning the 87A rebate under section 115BAC.
The demands arose because, in some processed returns, the 87A rebate was incorrectly allowed on incomes that are taxed at special rates, contrary to the provisions of section 115BAC(1A).
Taxpayers must pay the rectified demands by December 31, 2025, to have the interest under section 220(2) waived.
If the demand raised as a result of the rectification order is not paid by December 31, 2025, interest will be charged under section 220(2) of the Act.
The new tax regime is governed by section 115BAC of the Income-tax Act, 1961.
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