Simpler TDS refund route on anvil for those below tax limit

Taxpayers whose income falls below the taxable threshold, but who end up having tax deducted at source for a variety of reasons and then file income tax returns solely for the purpose of a refund, may no longer have to do so.

- Saubhadra Chatterji and Rajeev Jayaswal [e-mail]

Instead, they may be able to claim a refund by filling up a simple form.

A recommendation to this effect was made by the Select Committee on the Income-Tax Bill 2025, according to government functionaries directly familiar with the legislation.

“The panel felt that the current mandatory requirement to file a return solely for the purpose of claiming a refund can inadvertently leads to prosecution, particularly for small taxpayers whose income falls below the taxable threshold but from whom TDS has been deducted. In such cases, the law should not compel a return merely to avoid penalty,” one of the functionaries said, asking not to be named.

This person added that the government has accepted the suggestion and it will come as an amendment to the new bill.