The recently introduced Income Tax Bill 2025, in the Lok Sabha has raised concerns among taxpayers about their eligibility for income tax refunds if they file their Income Tax Return (ITR) after the due date.
Experts have noted that Clause 263(1)(a)(ix) of the new tax bill requires returns to be filed by the due date to claim refunds. This represents a significant change from the current provisions outlined in the Income Tax Act of 1961.
New Income Tax Bill Refunds
In the current tax law, even when an individual submits a belated return by December 31 of the assessment year then they can still claim for a refund for any excess tax filed.
However, under the draft of the Income Tax Bill 2025, the taxpayers may relinquish this right if they forget to file their ITR before the deadline (July 31 for most individual taxpayers).
A tax expert cites that-
“Clause 263(1)(a)(ix) of the Income Tax Bill, 2025, states that a refund can only be claimed if the return is filed within the due date. Additionally, Clause 433 specifies that refunds must be sought only at the time of filing the return. This change could pose significant challenges for taxpayers who, due to unavoidable reasons, miss the deadline but are otherwise eligible for a refund.”
No Amendment in Tax Refund Rules Government Explains
The Income Tax Department in between the emerging speculation has furnished a clarification citing that the refund provisions stayed unchanged. As per the department-
“Refunds will continue to be processed under Section 270 of the proposed Income Tax Bill, 2025, and will be granted under Section 271(1)(e). If a refund is claimed in an invalid return, relief may still be available under Section 239, similar to Section 119 of the existing law.”
It directed that the taxpayers will still be enable to claim the refunds even when they submit their income tax return(ITR) post-deadline opposite to initial interpretations of the bill.
Do You Claim a Tax Refund After the Belated Return Deadline?
Taxpayers may still be able to request a refund through a condonation application under Section 119(2)(b), if misses the final belated return due date (December 31). It needs a physical submission to the Principal Commissioner of Income Tax (Pr. CIT), with valid reasons for the delay.
A tax consultant elaborates:
“If a return is filed late, refunds can still be claimed through a belated return. However, if the return is not filed by December 31, a condonation request is required. Approval for such requests is at the discretion of tax authorities.”
Read Also: A Process to File Belated ITR with Late Fees
Significant References for Taxpayers
- Concerns are been raised by the Income Tax Bill, 2025, that refunds shall be denied if the returns were submitted late.
- It was mentioned by the income tax department that refunds can still be claimed under the updated law, likewise to the current laws.
- Under the current tax laws, the refunds could be asserted even with a belated return furnished by December 31.
- The taxpayer should apply for a refund under section 119(2)(b) by condonation of delay if misses the final due date.
Final Words: It was recommended by the initial interpretations of the income tax bill 2025 that a stringent way to refunds, the clarification of the government specifies that the taxpayer will still be enable to claim the refunds even after the deadline. However, it is to be seen whether any additional changes will be incurred before the bill is finalized.
At present taxpayers are suggested to submit their income tax return(ITR) before the deadline to prevent the penalties and unnecessary intricacies. You can claim your refund on missing the due date but the process shall get more difficult.
