TDS Refund Made Easier: Income Tax Bill 2025 Introduces Simple Form Instead of Full ITR
The Income Tax Bill 2025 introduces a simple form in place of full ITRs for TDS refund claims under ₹12.75 lakh income. It also enables broader nil-TDS certificates, late refund rights, and digital device clarity. Effective April 2026
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The Select Committee reviewing the Income Tax Bill 2025 has recommended simplifying the process for Tax Deducted at Source (TDS) refunds. Traditionally, salaried individuals whose income falls below the taxable threshold still had to file an Income Tax Return (ITR) to claim a TDS refund, potentially exposing them to penalties or prosecution if they missed deadlines .
Under the proposed amendment, those with no taxable income could claim TDS refunds through a simplified form linked to Form 26AS, bypassing the ITR filing requirement . This change also removes Clause 263(1)(ix)/Section 433(1)(9), which previously required anyone filing a refund claim to submit an ITR .
The measure specifically benefits taxpayers whose annual income is under the ₹12.75 lakh exemption limit but have paid TDS—for example, on interest earnings from banks where documentation wasn’t submitted to prevent deduction.
Additionally, the Bill promotes other taxpayer-friendly adjustments, such as:
Full refunds for late ITR filers
New nil‑TDS and lower‑TDS certificates, allowing broader access rather than limiting eligibility to specific payment types
Greater clarity on access to digital devices during tax assessments.
The Income Tax Bill 2025, which consolidates outdated provisions from the 1961 Act and introduces the concept of a “tax year,” is expected to take effect from April 1, 2026.
