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Corydalis austroshaanxiensis, a new species of Corydalis sect. Incisae Fedde (Papaveraceae) from Shaanxi, China, is described. It is most similar to C. pseudoincisa C.Y. Wu, Z.Y. Su & Lidén, but differs in the outer petals being retuse to emarginate, with dorsal crest (versus acuminate, rounded to shortly mucronate, without crest), lowermost pedicels that are conspicuously elongating and basally recurved in fruit (versus slightly elongating, straight, erect‐spreading), sepals that are 3–4 × ca 3 mm (versus 1.5–2.0 × ca 1.5 mm), lower petals that usually have a linear reddish tint at base (versus without reddish tint), capsules that are narrowly to broadly elliptic to obovoid (versus linear to narrowly oblong), and by the racemes corymbose, forming a very dense cluster of upper fruits (versus racemes not corymbose‐like, flower dense in anthesis, lax in fruit). The original materials of C. pseudoincisa is shown to be mosaic, and the original descriptions and illustrations annotated as C. pseudoincisa only fit in part C. pseudoincisa. A revised circumscription for C. pseudoincisa is thus provided. We suggest the need for caution when identifying additional specimens as paratypes that differ from the holotype in distinct characters. [ABSTRACT FROM AUTHOR]