New IT Bill allows refunds for late returns, adopts Select Committee suggestions

The new Income Tax bill, which was passed by Lok Sabha on Monday, provides flexibility for allowing refund claims in cases where the return is not filed in due time and reduces the time period for filing TDS correction statements to two years from six years as provided in the Income Tax Act, 1961, government sources said.

- TBG NETWORK

The Income Tax (No. 2) Bill, 2025, was passed without debate amid protests by opposition parties, hours after it was introduced in the House by Finance Minister Nirmala Sitharaman.

It incorporates almost all suggestions of the Select Committee that examined the bill.

The Income Tax (No. 2) Bill, 2025, which was introduced on Monday afternoon after the government on Friday last withdrew the Income Tax Bill, 2025 in the Lok Sabha, incorporates almost all recommendations of the Select Committee, which examined the legislation.

The provisions of the new Income Tax Bill will come into effect from the next fiscal.

The Government had said in the budget in July 2024 that a time-bound comprehensive review of the Income-tax Act, 1961 would be undertaken to make the Act concise, lucid, and easy to read and understand.

The new Income Tax Bill was passed without debate amid opposition protests over their demand for debate on Special Intensive Revision (SIR) of electoral rolls in Bihar.

Both Lok Sabha and Rajya Sabha have witnessed continuous disruptions since the beginning of the monsoon session of Parliament over the opposition's demand.