Still No Relief for Small Taxpayers: Refunds Still Require ITR Filing Under New Law
Thank you for reading this post, don't forget to subscribe!The new Income Tax Bill 2025 has been a source of both hope and frustration for many. While it adopted several recommendations from a parliamentary panel, it failed to include one crucial change that would have significantly eased the burden on small taxpayers: a simplified way to claim a refund without filing a full income tax return (ITR).
This is a major disappointment, especially for senior citizens and low-income taxpayers whose total income is below the basic exemption limit. Even if they have had excess tax deducted at source (TDS), they will still have to go through the administrative hassle of filing an ITR just to get their money back.
The Select Committee had strongly recommended against this, arguing that the law should not force people to file a return merely to avoid penalties. As tax expert Sharanya Tripathi put it, this is a “glaring omission” that creates an unnecessary burden and a “legal trap” for honest taxpayers.
In short, the status quo remains unchanged. The new bill, through Section 433, still mandates that a refund claim can only be made by furnishing a return. This is a missed opportunity to simplify the process and provide genuine relief.
