New Income Tax Bill has made it easier for those who file late ITR, now they can claim refund even after the deadline..

The deadline for filing Income Tax Return (ITR) often becomes a cause of stress for many people. In a busy life, many times people are not able to file their returns by the last date. Till now, a big disadvantage of this was that if any of your Tax Deducted at Source (TDS) had been deducted, then you could not claim its refund by filing ITR late. But now the government has given a big relief to the taxpayers in this matter.

A provision has been made in the new Income Tax Bill passed in the Lok Sabha, which will directly affect your pocket. According to this new rule, now taxpayers who submit ITR late will also be able to claim a refund of the additional tax deducted.

What is this new change, and how will it affect you?

According to the old rules, if you were not able to file your return by the due date of ITR filing and later filed a 'belated ITR', then you did not get the right to get a refund. Your money used to remain with the government.

But the new Income Tax Bill has changed this condition. Now, even if you miss the deadline for some reason, you can still claim your ITR refund by filing returns later. This is a big win for lakhs of taxpayers whose refunds used to get stuck due to small reasons.

Important thing for small taxpayers and senior citizens
While relief has been given in the new bill on one hand, one thing has been made clear. Many people felt that if their income does not fall under the tax ambit, then they do not need to file returns to get a refund. The parliamentary committee had recommended that taxpayers should not be forced to file returns only to avoid a penalty.

However, Section 433 has been retained in the new bill, according to which the filing of a return is mandatory to claim a refund. This means that-

Senior citizens: Those whose TDS has been deducted on bank fixed deposits (FDs), but whose total income is less than the tax exemption limit, will also have to file ITR to get TDS refund.

Small taxpayers: Those people whose salary is low but TDS has been deducted for some reason will also have to file a return to get that money back.

Understand the whole matter with an example.

Suppose there is a senior citizen whose annual income is only from the interest of Rs 3.5 lakh received from FD. As per the rule, the bank deducted 10% TDS on his interest, that is, Rs 35,000. Since his income does not come under the tax purview, he is entitled to a refund of the entire Rs 35,000.

Old rule

If he is unable to file ITR by the due date, then he would lose the claim for this refund of Rs 35,000.

New rule

Now, even if they file their late ITR after the due date (within the stipulated time limit), they can still claim their refund of Rs 35,000.

Experts' opinion: Law made easy for the common man
Tax experts have welcomed this move. According to Preeti Sharma, partner at BDO India, "The biggest advantage of the new law is that the common man can easily understand it with less effort as compared to the old law." The amended bill incorporates most of the changes suggested by the Select Committee. However, taxpayers will still have to carefully choose the right tax regime (old or new) for themselves. No change is proposed in the tax rates introduced in Budget 2025.

Difference between the old and the new rule

Feature Old Rule New Rule

Refund on late ITR: Refund could not be claimed. Now, the refund can be claimed. Filing ITR was mandatory to get a refund. Filing ITR is still mandatory.
For whom is it beneficial? Only for those who file ITR on time. For all taxpayers, especially those who miss the deadline.
Legal complexity More complex and stringent. Simple and taxpayer-friendly.

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