However, if a taxpayer fails to meet the December 31 deadline for filing a belated return, they cannot receive a refund through normal ITR filing
One of the major concerns regarding provisions in the new Income Tax Bill (ITB) 2025, is that those who file their returns late will not be eligible for refunds. Certain provisions in the bill have created confusion among taxpayers. Clause 263(1)(a)(ix) of the new bill says that those who claim refunds should file their ITR within the stipulated date. In the Income Tax 1961, it is said that taxpayers can claim refunds even if they submit delayed returns by 31 December of the assessment year.
Clause 433 of the new ITB states that taxpayers should request refunds only when filing returns. This provision would be bad news for taxpayers who miss filing their returns by the due date for genuine reasons, such as health issues. Even if they have paid excess TDS, they may be barred from claiming refunds.
Income Tax Department Issues Clarification
However, the Income Tax Department has subdued these concerns by clarifying that refund-related provisions will remain the same. The department has also stated that individuals are still eligible to claim refunds, even if returns are filed late. Overall, as of now, there will be no change when it comes to the refund process.
Having said that, a taxpayer will not receive a refund through normal ITR filing, in case he cannot meet the December 31 deadline. In such a case, he can they can request coronation from the Principal Commissioner of Income Tax (Pr. CIT) or Commissioner of Income Tax (CIT). This request must be made under Section 119(2)(b) through a physical form on an individual basis, and a valid reason for delay must be specified.
In essence, the Income Tax Bill 2025 does not alter the current rules for claiming refunds. Taxpayers can still claim refunds if they file their ITR beyond the due date of 31 July, But if they fail to submit a belated return by 31 December, they will be required to apply for condonation. The refund provisions in the new bill thus remain the same as the existing Income Tax Act.