Govt plans to fix refund provision in new I-T Bill

In a relief to taxpayers, the government is likely to amend the controversial refund provision in the new Income Tax (I-T) Bill, 2025, which denies refunds if the I-T return is filed after the due date, according to an official in the finance ministry.

- MONIKA YADAV

Section 433 of the new I-T Bill states a refund must be claimed by filing a return regardless of whether it is belated. In contrast, Section 263(1)(a)(ix) specifies that to qualify for a refund, the return must be filed on or before the due date, creating a contradiction.

"Experts and stakeholders have raised concern over the refund provision in the draft Bill. That was a drafting error, which will be rectified," a government official told Business Standard. "The provisions related to refund will remain the same as in the current law," the official added.

Union Finance Minister Nirmala Sitharaman had introduced the new I-T Bill, 2025, on February 13. After that, a select committee constituting 31 members of Parliament (MPs) was formed to examine it.