Will you be eligible for a refund even if you file your ITR (income tax return) late? This concern was raised by many people due to the introduction of new Income Tax Bill 2025 in the Lok Sabha. Many experts have pointed out that the new income tax bill, which is likely to be applicable starting FY2026-27, highlights that if taxpayer does not file their income tax returns before the due date, they will not be eligible to get a refund. Experts are pointing out the same on various social media platforms.
https://x.com/taxguru_in/status/1891386578699960458According to Vivek Jalan, Partner, Tax Connect Advisory Services LLP, “Clause 263(1)(a)(ix) of The New Income Tax Bill 2025 requires that a person seeking refunds under Chapter XX must mandatorily file Income Tax Returns within “due date.”. This is in sharp variance to the current Income Tax Act 1961, where a person, even filing a belated return till 31st Dec of the assessment year, can claim refunds if due to them.”
“On top of that, Clause 433 requires that a refund should be sought only while filing a return. Such a provision would create a hardship for individual taxpayers who miss the due dates due to genuine reasons. In such cases, even in case excess TDS is deducted they can be barred from claiming refunds,” he adds.
Other experts also point out this ambiguity, which conveys the meaning that in case an individual does not file their ITR before the due date, which is July 31st for individual taxpayers, they will not be eligible for any refunds if they file their returns thereafter.
Inadvertent error or change of rule—what is the source of confusion?
As per a new report on the income tax bill by RSM Astute Consulting, a tax advisory firm, “Under the current Income Tax Act, 1961, there are no provisions that prohibit an assessee from claiming a refund solely on the ground that the return of income was not filed within the prescribed due date.”
“However, the Income Tax Bill, 2025, introduces a specific subsection that expressly disallows an assessee from claiming a refund if the return of income is not filed within the prescribed due date. It needs to be seen if this is an inadvertent mistake and whether any changes are made to this provision before the bill is legislated,” it notes.
As CA Ashish Niraj notes, “As per Income Tax Bill 2025, Section 263 governs the various due dates of filing of ITR. In the new bill, only due dates for various returns are given; there is no mention of belated returns, meaning thereby that if anyone files his return after the due date, then he will not be claiming a refund, which was earlier allowed till 31st December by way of a belated return.”
As he explains, Section 263(1)(a)(ix) of the income tax bill indicates that filing within the due date is compulsory to claim a refund.
As per CA Bhavesh Jindal, “In the newly tabled Income-tax Bill, 2025, a draconian provision relating to the issuance of refund is proposed under the return filing section itself, i.e., section 263(1)(a)(ix), which requires that a person who intends to claim refund shall furnish a return of income within due date. The said restriction is not there under the current tax law, although there is a provision that restricts the carryforward of certain losses in case a return is filed after the due date. However, restricting the refund in a case where a return is filed after the due date will cast a huge burden on the taxpayers and seems to be a little harsh. Hopefully, the committee will receive a recommendation, and relaxation might be provided in the revised print,” he adds.
What are the current provisions for claiming refunds under the Income Tax Act 1961?
As per Section 237 of the erstwhile Income Tax Act 1961, if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount which he rightfully owes under the Act for that year, he/she shall be entitled to a refund of the excess.
This refund was allowed simply by filing the ITR within the due date of filing the ITR under Section 139. As per the Income Tax Act, a normal return was allowed to be filed till 31st July (individual taxpayers), and a belated return was allowed to be filed under Section 139(4) up to 31st December of the relevant assessment year.
Under section 234(F) of the I-T Act, 1961, an individual who files a late or belated ITR will have to pay a penalty of Rs 5,000. In case their annual taxable income is less than Rs 5,00,000, their penalty will be Rs 1,000. This applies even if the individual files a belated ITR citing zero tax liability.
No change in refund rule, taxpayers can still claim after due date, says I-T department
In this regard, the I-T department has issued a clarification, stating that please note that under the Income-tax Act, 1961, individuals claiming a refund under Chapter XIX are required to file a return of income under Section 239. This requirement will now be incorporated u/s 263(1)(ix) of the bill. The other provisions related to the issuance of refunds remain unchanged.
“The returns of income filed under u/s 263 or in response to a notice u/s 268(1) will be processed under u/s 270, determining any sum payable or refund due, which will be granted u/s 271(1)(e). If a refund is claimed in an invalid return, relief may be available under Section 239 of the Income Tax Bill (corresponding to s. 119 of the I-T Act, 1961). Thus, there is no change in the refund-related provisions in the bill.”
Will I be able to claim any refund if I file my ITR after the due date?
All provisions for claiming a refund remain unchanged. This means that taxpayers will be able to claim refunds even if they file their ITR after the due date under the new income tax bill, which is set to become effective starting April 1, 2026.
Says CA Ashish Karundia, “We have come across texts making rounds claiming that changes have been made to the income-tax refund provisions under the Proposed Income Tax Bill 2025, requiring taxpayers to file their returns on time to claim a refund. We wish to clarify that this is not true and is incorrect. “
“The only thing that the Proposed Income Tax Bill 2025 has done is that they have specified various situations which necessitate the filing of a return. There have been no alterations to the income-tax refund provisions in comparison to the current Income Tax Act of 1961. Taxpayers can still claim refunds under the Proposed Income Tax Bill 2025 even if they file a revised or belated return adds Karundia.
Will I be able to claim my refund if I file my ITR after the belated date?
If a taxpayer fails to file the belated return by 31st December, they lose the right to claim a refund through regular ITR filing. In such cases, the only option available is to file a condonation request under Section 119(2)(b) with the Pr. CITs/CITs. This request must be submitted physically to the income tax department and is processed on a case-to-case basis, requiring a valid reason for the delay. Approval for such applications is at the discretion of the tax authorities.
As per Sujit Sudhakar Bangar, founder, TaxBuddy.com, “filing an ITR after the due date does not automatically disqualify the taxpayer from claiming a refund. Refunds can still be claimed through a belated return, but if the return is not filed by 31st December, the refund can only be sought through a condonation request under Section 119(2)(b). The new tax regime does not change these filing deadlines, and the provision for belated returns remains intact.”
