Overview

• The Finance Ministry issued the corrigendum on August 11–12 to amend Clause 425 and reinstate a 3% simple interest per quarter on shortfalls in advance tax payments.
• The change overturns an unintended provision for 1% interest per month in the revised Bill and aligns its language with the existing Income Tax Act, 1961.
• The Lok Sabha Select Committee identified the drafting mistake within a day of the Bill’s introduction and formally recommended the correction.
• Tax experts say the corrigendum preserves established practice—charging interest for a minimum of three months even for a one-day delay—and is unlikely to increase overall taxpayer liabilities.
• The Income Tax Bill, 2025 remains on track through Parliament as part of a broader effort to replace and simplify India’s six-decade-old tax law.