New Income Tax Bill Allows Late Return Refunds, Adopts Select Committee Inputs

The Lok Sabha has passed the Income Tax (No. 2) Bill, 2025, replacing the 1961 Act with simplified provisions aimed at making tax laws clearer, flexible, and more taxpayer-friendly.

- TBG NETWORK

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.

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.