Circular No. 8/2025

Clarification regarding CBDT's Circular No. 5/2025 dated 28.03.2025 for waiver on levy of interest under section 201(1A)(ii)/ 206C(7) of the Income-tax Act, 1961, as the case may be, in specific cases

What this is

Circular No. 8/2025 was issued by the Central Board of Direct Taxes on 1 July 2025. Its subject is Clarification regarding CBDT's Circular No. 5/2025 dated 28.03.2025 for waiver on levy of interest under section 201(1A)(ii)/ 206C(7) of the Income-tax Act, 1961, as the case may be, in specific cases.

This is an approval of a named institution. It affects that institution and the people who deal with it; the years it covers are stated in it and are the whole of its reach.

What it does

Answers a question of timing thrown up by Circular No. 5/2025 dated 28 March 2025, which allows waiver of interest under section 201(1A)(ii) and section 206C(7). Three things are settled. The prescribed authority, that is the Chief Commissioner, Director General or Principal Chief Commissioner, may pass a waiver order only after the date the earlier circular issued. An application must be made within one year from the end of the financial year for which the interest is charged, so that interest pertaining to financial year 2023-24 had to be applied against by 31 March 2025. Subject to that time limit, an application may be entertained for interest charged even before the earlier circular issued.

Why it was issued

Field authorities represented, asking whether the power to waive was effective only from the date the earlier circular issued, or whether applications could be entertained only where the interest was charged on or after that date.

Who it reaches

Deductors charged interest under section 201(1A)(ii) for delayed payment of tax deducted
Collectors charged interest under section 206C(7)
Chief Commissioners and Principal Chief Commissioners passing waiver orders
Applicants with interest charged in years before March 2025

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.201	s.2, s.398

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

F. No. 275/92/2024-IT (B) Government of India Ministry of Finance Department of Revenue Circular No. & /2025 Central Board of Direct Taxes North Block, New Delhi Dated: 1!.~July, 2025 Subject: Clarification regarding CBDT's Circular No. 5/2025 dated 28.03.2025 for waiver on levy of interest under section 201(1A)(ii)/ 206C(7) of the Income-tax Act, 1961, as the case may be, in specific cases- reg. In respect of Circular No. 5/2025 dated 28.03.2025, representations have been received from field authorities to clarify whether the prescribed authority empowered to pass waiver orders under this circular is deemed to be effective from the date of issuance of the circular or whether waiver applications are to be entertained only in cases where the interest under section 201 (lA)(ii)/ 206C(7) of the Income-tax Act, 1961 ("the Act") is charged on or after the date of issuance of the said circular. 2. The matter has been examined and it is hereby clarified that: (i) The prescribed authority (i.e. CCIT/ DGIT/ Pr.CCIT) is empowered to pass order for waiver after the date of issue of the said Circular. (ii) As mentioned in Para 6 of the said Circular, applications for waiver of interest can be entertained within one year from the end of the financial year for which the interest is charged. For instance, if the interest charged pertains to FY 2023-24, the application for waiver of such interest can be filed by 31 .03.2025 i.e. one year from the end of FY 2023-24. (iii) Further, it is also clarified that waiver applications can be entertained for interest u/s 201(1A)(ii)/ 206C(7) of the Act charged even before the issuance of the said Circular, subject to (ii) above. (Z' Singh) Deputy Secretary, IT-Budget CBDT Copy to:- 1. The Chairman & Members, CBDT. 2. All Pr.CCsIT, CCsIT/ DGslT. 3. All Joint Secretaries/CsIT., CBDT. 4. Commissioner of Income-tax (Media & TP) and official Spokesperson, CBDT, New Delhi. 5. ADG (PR, P&P) for necessary action. 6. JCIT, Database Cell, with a request to upload the order on the website www.irsofficersonline.gov. in. 7. Web Manager, O/o DGIT(Systems) with request to upload on the departmental website of www.incometaxindia.gov .in. 8. The Institute of Chartered Accountants of India, IP Estate, New Delhi 9. All Chambers of Commerce. 10. 11. Hindi Cell for translation. The Guard File. (Rubal Singh) Deputy Secretary, IT-Budget CBDT

What to watch

The one-year limit runs from the end of the financial year for which the interest is charged, not from the date of the demand or of the waiver circular, and it is the real constraint on old cases.
Read together, the second and third points mean that older interest is theoretically covered but often already out of time on the very date the clarification issued.
Only the interest limb under section 201(1A)(ii) and section 206C(7) is in question; the tax itself is not waived.
The conditions and the categories of case in Circular No. 5/2025 continue to apply; this circular changes none of them.

Where you meet it

In a waiver petition to the Chief Commissioner against interest levied in an order under section 201(1A) or on processing of a TCS statement.

An example

Ours, not the Board’s: a worked case built from the rule the instrument sets, to show how it falls out.

A deductor is charged interest under section 201(1A)(ii) in respect of financial year 2023-24. Applying paragraph (ii), his waiver application had to reach the prescribed authority by 31 March 2025, one year from the end of that financial year, even though the enabling circular itself issued only on 28 March 2025.

What it names

It mentions. Circular No. 5/2025

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 4/2024 — Ex post facto extension of due date for filing form no. 26QE which was required to be filed during the period 01.07.2022 7 March 2024
Circular No. 42/2016 — Circular No. 42 of 2016 23 December 2016
Notification No. 37/2012 — Income-tax (Eleventh Amendment) Rules, 2012 - Insertion of rules 31ACB, 37J, Form Nos. 26A & 27BA 12 September 2012
Circular No. 8/2009 — Section 194J of the Income-tax Act, 1961 - Deduction of tax at source - Fees for professional or technical services - Ap 24 November 2009
Circular No. 6/2009 — Clarification Regarding Deduction of TAX at Source from Payments of Second Installment of Arrears to Government Employee 31 August 2009
Circular No. 758 — 959. Clarification regarding deduction of tax from payments of additional pay, allowances and arrears to Central Govern 7 November 1997

← Circular No. 9/2025 · Circular No. 7/2025 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.