New Income tax bill 2025: MUST know tax refund rule during ITR filing

The introduction of the Income Tax Bill 2025 in the Lok Sabha sparked concerns among taxpayers about their eligibility for refunds if they file their Income Tax Return (ITR) after the due date. Initial reports suggested that the new bill would prevent late filers from claiming refunds, marking a shift from the current Income Tax Act, 1961, where individuals can still claim a refund if they submit a belated return by December 31 of the assessment year.

Experts are highlighting on social media that the new income tax bill, expected to take effect in FY2026-27, may eliminate refunds for taxpayers who fail to file their returns by the due date.

“Under the Income Tax Act, 1961, there's no bar on claiming a refund solely because the return wasn't filed on time. However, the Income Tax Bill, 2025 proposes a new rule: no refund if the return is late,” tweeted TaxGuru.

However, the Income Tax Department has clarified that there are no changes in refund provisions.

“Dear @taxguru_in, As explained in our FAQs (link below), there are no policy changes in the provisions related to Refunds in the new Income Tax Bill, 2025,” the Income tax department posted on X.

“The requirement to claim a refund through a return filing has always existed under Section 239 of the Income Tax Act, 1961, and will now be reflected in Section 263(1)(ix) of the new bill. The bill only reinforces the requirement to file a return for refund claims and does not introduce any new restrictions,” said Abhishek Soni, CEO and Co-founder of Tax2win.

FAQs: Income Tax Bill 2025 makes no changes to refund provisions

How will the simplification efforts in filing the return of income will help me as a taxpayer?

Chapter XV of the bill is divided into: Part A (about PAN) and Part B (about filing the return of income). The proposed section 263(1)(a) of the Bill lists the various categories of assessees required to file income returns. Under Section 139 of the Income Tax Act, 1961, these assessees are scattered across various sub-sections. In the proposed income ta x bill, all assessees are consolidated in one place, which makes it easier for each category of assessee to locate and fulfil their return filing obligations.

Are exempt entities required to file a return of income?

Yes, exempt entities continue to be under obligation to file a return of income if their total income before allowing exemption exceeds the maximum amount not chargeable to income tax.

Have the due dates for filing returns of income changed?

No, the due dates for filing income returns for each category of assessees are still the same. They are now presented in a tabular format for easier understanding.

Have the provisions for belated, revised, and updated returns changed?

No, the provisions regarding belated, revised, and updated returns remain the same as in the Income Tax Act, 1961(including amendments proposed vide Finance Act, 2025).

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.