I read online that to claim a tax refund under the proposed Income Tax law, the income tax return needs to be filed within the original given due date. If it is not filed within that date, a refund cannot be claimed even if the income tax return is filed on a delayed basis later on. Is this true?
-Name withheld on request
Under the current Income Tax Act, 1961 (ITA), an individual is required to file an income tax return under section 139 if his/her income exceeds the basic exemption limit. Additionally, section 239 of the IT Act mandates the filing of a tax return under section 139 if there is a claim to be made for a tax refund. Since the only condition under section 239 for claiming a refund is to file a tax return under section 139, both revised and belated returns are covered under this provision.
However, under the proposed Income-Tax Bill, 2025 (ITB), clause 263 (which corresponds to section 139 of the ITA) requires an individual to file the return by the original due date, i.e., 31 July of the succeeding financial year to make a claim for refund.
Simultaneously, clause 433 (which corresponds to section 239 of the ITA) allows a refund claim to be made even if the tax return is filed within the extended time limits prescribed for filing revised or belated returns under clause 263 of the ITB.
On account of this confusion, the Income Tax Department’s handle on social media platform ‘X’ has clarified that there is no change in the refund-related provisions in the ITB, including filing a condonation application to claim a refund beyond the expiry of return filing time limits. This ambiguity is also expected to be resolved when the ITB is enacted into the new Income Tax Act.
Is there any change in the definition of existing NRI that I should be aware of in the new income tax law in India?
-Name withheld on request
The Income Tax Bill, 2025 was introduced in the Lok Sabha on 13 February 2025. Thereafter, it has been referred to a select committee for further review. As far as non-residents are concerned, there is no policy change in any criteria for determination of their residential status under the new Income Tax-Bill 2025 (ITB) vis-à-vis the present Income Tax Act, 1961 (ITA).
There is a small issue in the Income Tax Bill provision text for NRIs coming to India on a visit, where the required stay period of 182 days in India is reduced to 120 days if their Indian income exceeds ₹15 lakh. Due to a drafting error, this clause is actually rendered inapplicable and the threshold stay period in such cases remains at 182 days. However, this anomaly is expected to be corrected when the ITB is enacted into the new Income Tax Act.
Harshal Bhuta is partner at P. R. Bhuta & Co. CAs
