New Income Tax Bill: Late filers can also claim tax refunds

Under the new Income Tax Bill passed in the Lok Sabha, taxpayers who file their ITR late can also claim refunds for excess tax deducted.

Analysts said on Tuesday that the new Income Tax Bill does not propose eliminating the requirement for small taxpayers to file returns solely to claim tax refunds.

This means small taxpayers will still have to file ITRs to receive tax refunds.

The new Income Tax Bill retains Section 433, which states that ‘every claim for refund must be made by submitting a return under Section 263.’

Under the new Income Tax Bill, taxpayers who file or revise their ITR after the deadline will still be eligible for refunds.

Small taxpayers, including senior citizens, will have to file returns to claim refunds for Tax Deducted at Source (TDS), even if their income is below the basic exemption limit.

A parliamentary committee had recommended that taxpayers should not be compelled to file returns merely to avoid penalties.

The revised bill incorporates most of the changes suggested by the select committee. Taxpayers will still need to assess the correct regime when filing returns. Similarly, no changes have been proposed to the tax rates introduced in the 2025 Budget.

The new bill was passed after incorporating recommendations from a 31-member parliamentary committee.