8 key things every ITR filer should know under the new income tax bill: Belated return, I-T refund and more

The new Income Tax Bill 2025 aims to simplify the current tax system. It features clearer language along with important updates for income tax return (ITR) filers.

Among the several other reforms, the bill introduces changes to various rules related to ITR filing. Once approved by the President, the new law will take effect from April 1, 2026.

ITR filers should know about these eight things in the new tax bill

The recent amendment in the Income Tax Bill is a significant relief for taxpayers.

The Bill also allows individuals to claim refunds without penalty on delayed filings. It says individuals will be allowed to claim TDS refund even if their return of income is filed beyond the statutory timeline provided for filing of the original income-tax return.

The full amount of a commuted pension will now qualify for a full tax deduction, This applies to people who get pensions from specific funds, such as the LIC Pension Fund, which is included in Schedule VII of the bill.

"This change ensures that private sector employees or anyone who has independently invested in a pension fund now receives the same tax relief as salaried employees," said Archit Gupta, Founder & CEO, ClearTax.

Under this provision, up to 60% of the total corpus received at the time of retirement, voluntary retirement, or superannuation will be tax-exempt. Additionally, any lump sum amount received under the scheme, as notified by the government on January 24, 2025, will also be exempt from tax.

• July 31: For salaried individuals and others not requiring audit
• October 31: For companies, individuals, and partners whose accounts are subject to audit
• November 30: For those required to submit a report under Section 172, including certain partners and their spouses

A belated return can be filed within 9 months from the end of the relevant tax year or the completion of the assessment year.

As per Clause 263 of the revised Income Tax Bill, 2025, the following are required to file ITR:

• All companies and firms

• Individuals with income above the basic exemption limit

• Those with business or capital losses they want to carry forward

• Residents holding foreign assets or having signing authority in foreign accounts

• Resident beneficiaries of foreign assets

A ‘tax year’ is a period of 12 months contained in a financial year. It replaces the term ‘previous year’ used in the Income Tax Act, 1961.

Further, with the discontinuance of the use of the term ‘assessment year’ in the Income Tax Bill, now the term ‘tax year’ will now be used in relation to the rate or rates of income tax also.