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New Delhi, June 16, 2025 – If you've missed your Income Tax Return (ITR) filing deadline this year and are worried about losing your tax refund, there’s some relief on the horizon. The Indian government is preparing to amend the Income Tax Bill 2025 to resolve confusion over whether refunds are allowed for belated returns.

At the heart of the issue lies a contradiction between two sections of the proposed bill—one of which suggested that only timely filed ITRs would be eligible for refunds, contradicting current tax norms. However, the Finance Ministry has acknowledged the drafting error and confirmed that the existing refund eligibility rules will remain unchanged.

🧾 What the Income Tax Bill 2025 Originally Stated

The draft Income Tax Bill 2025, presented in Parliament on February 13, 2025, included a provision that sparked panic among taxpayers. Specifically, Section 263(1)(a)(ix) implied that only ITRs filed before the due date would be eligible for refunds. This was in direct conflict with Section 433 of the same bill, which aligned with the current law that permits refunds even on belated returns, provided the return is eventually filed.

This conflicting language caused widespread confusion among tax professionals, individual taxpayers, and financial planners alike.

🛠️ Government to Fix Drafting Error

According to a Business Standard report, a senior Finance Ministry official clarified that the contradictory clause was a drafting oversight. “We’re aware of the inconsistency and will amend the bill accordingly,” the official said. The assurance brings clarity to millions who may file their returns late but are still hoping to claim tax refunds.

The ministry has reaffirmed that current refund provisions—where even late filers are eligible—will continue unless otherwise explicitly changed by law.

🔍 What’s Next for the Tax Bill?

The Income Tax Bill 2025 is currently under review by a 31-member select committee formed shortly after its tabling in Parliament. In March, the Central Board of Direct Taxes (CBDT) invited feedback from both taxpayers and tax professionals to improve the bill’s clarity and taxpayer-friendliness.

The committee is expected to submit its recommendations on the first day of the monsoon session of Parliament. Based on these inputs, the Finance Ministry will make necessary changes. If all goes as planned, the new tax code will come into effect from April 1, 2026.

🗓️ Who Has to File ITR and By When?

The deadline for filing ITR varies depending on the type of taxpayer:

• Salaried individuals and Hindu Undivided Families (HUFs) with no audit requirement must file by July 31.

• Businesses, professionals, and companies that are subject to audit must file by October 31.

• Belated or revised returns can still be filed up to December 31, but attract a late filing fee and certain limitations, such as ineligibility to carry forward losses.

💡 What This Means for Taxpayers

This clarification brings much-needed relief, especially for small taxpayers, freelancers, and professionals who occasionally miss the ITR deadline due to oversight or unavoidable circumstances. As per existing norms, even a late-filed return qualifies for a refund, although it may come with penalties and interest charges.

However, the incident underscores the importance of reading draft legislation carefully and ensuring transparency in tax policy communication.

✅ Key Takeaways:

• The Income Tax Bill 2025 had conflicting sections on refund eligibility.

• The government has acknowledged the mistake and plans to amend it.

• As per current law, refunds are still available on late ITR filings.

• The new tax law is expected to be implemented from April 1, 2026.

• Always try to file your return by the deadline to avoid penalties and maintain eligibility for full benefits.