Incorrect Rebate on Your Tax Demand? Pay by December 31, 2025, to Avoid Interest
Thank you for reading this post, don't forget to subscribe!The Central Board of Direct Taxes (CBDT) has issued an order to help taxpayers who received an incorrect tax rebate.
What Happened?
- Some taxpayers who chose the new tax regime (under Section 115BAC) were mistakenly granted a rebate under Section 87A on income that should not have qualified for it.
- The Income Tax Department is now correcting this error, which is creating a new tax demand for those affected. Normally, any delay in paying this new demand would result in interest charges under Section 220(2).
The CBDT’s Solution
- To ease the burden on these taxpayers, the CBDT has decided to waive all interest on these demands.
- This waiver is conditional: you must pay the full amount of the new demand by December 31, 2025.
What If You Don’t Pay on Time?
- If you fail to pay by the deadline, the interest will be applied as if the waiver never existed. It will be charged from the day after the original payment due date.
This is a one-time opportunity to clear your tax dues without facing additional penalties. Make sure to pay your demand by the end of 2025 to benefit.
