The new Income Tax Bill, 2025 contains some provisions which have created ambiguity regarding the eligibility for claiming tax refunds.
To be specific, clause (ix) under ‘Section 263(1)(a)’ of the new Bill mandates that a taxpayer who intends to claim a refund, is required to file their Income Tax Return (ITR) within the “due date” (the date of the financial year immediately succeeding the relevant “tax year”).
However, ‘Chapter XX’ of the new Bill dealing with refunds provides for interest on refunds even in cases where returns are filed “outside of the due dates”.
There is also no restriction placed on claiming a refund in a revised or belated tax return, unlike in the case of an updated return, in the new Bill, say experts.
According to the new Bill, the due date for filing returns by company, and person (whose accounts are required to be audited) is October 31, and for individuals, is July 31.
“Chapter XX seems to be inconsistent with Section 263 (of the new Bill). Hopefully, this gap will be plugged once the Bill is legislated,” said Dipesh Jain, partner, Economic Laws Practice.
Under the existing law, I-T Act, 1961, taxpayers are eligible to claim refunds even if they filed belated income tax returns. The new bill, however, appears to restrict this eligibility by potentially disallowing refunds for returns filed after the due date, noted Amit Maheshwari, tax partner, AKM Global.
“This could adversely affect genuine taxpayers who, for valid reasons, may not be able to file their returns within the stipulated timeline,” he added.
Experts say in the extant 1961 Act, section 239 (dealing with refunds), requires a person to claim refund by filing a return in accordance with the provisions of section 139 (related to ITR filing process), and the same concept is present in the new Bill too.
“Thus the amendment in the new Bill to include persons intending to claim refund within statutory obligation to file return may be regarded as clarificatory or an enabling provision – more particularly for persons who are otherwise not obligated to file return but need to claim refund,” Surabhi Marwah, tax partner, EY India.
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