You can get a TDS refund even after missing the ITR deadline in new bill

In a big relief for many taxpayers who miss the income tax return (ITR) filing deadline, the revised income tax bill 2025 states that individuals can now claim a TDS (Tax Deducted at Source) refund even if their ITR is filed beyond the statutory timeline provided for filing of the original income tax return.

With the deletion of Clause 263(1)(ix), the Income Tax (No.2) Bill eliminates the requirement and gives people "flexibility" by permitting refund claims in situations where the return is not filed on time.

The Select Committee recommended eliminating the clause in the Income Tax Bill that requires an assessee to file I-T returns by the deadline in order to allow for the repayment of TDS claims by people who are otherwise exempt from filing tax returns.

This flexibility is a good thing since it guarantees that refunds will be given to people who file late or amended returns.

“The recent amendment in the Income Tax Bill is a significant relief for taxpayers. Now, individuals can claim TDS refunds even if their income tax returns are filed after the statutory deadline. This means, even if you file belated or revised returns, you will still be eligible for a TDS refund, said Abhishek Soni, CEO and Co-founder of Tax2win.

"This move encourages compliance and eases the refund process, especially for those who miss the original filing timeline,” he added.

What is TDS?

Tax Deducted at Source (TDS) is a system introduced by the Income Tax Department of India to collect tax from an individual's income source.

For instance, when you receive your salary, the person making the payment deducts a certain percentage as tax before paying you the remaining amount, which is then deposited with the government.

The new bill also incorporates provisions from the Taxation Laws (Amendment) Bill, 2025, which was recently passed by the Lok Sabha. These additions include tax exemptions for subscribers of the Unified Pension Scheme (UPS) and direct tax benefits for public investment funds from Saudi Arabia.