Income Tax Bill 2025: Select committee begins talks, experts raise concern on tax refund

Tax experts and industry bodies have highlighted concerns on income tax refund to the Select Committee of Lok Sabha on the Income Tax Bill, 2025, during deliberations on the bill, which started earlier this month.

The committee has held deliberations with four rounds of deliberations with the industry bodies and tax consultants. Confederation of Indian Industry (CII), Federation of Indian Chamber of Commerce and Industry (Ficci), EY, and Institute of Chartered Accountants of India (ICAI) have given their submissions to the committee headed by BJP MP Baijayant J panda.

According to sources, the representatives have raised concerns on one of the provisions in the new Income Tax Bill, which states that income tax refund will not be granted if the return of income is not filed within the due date. There is no such provision in the Income Tax Act, 1961, which the bill seeks to repeal.

The respondents were of the view that a provision like this will lead to further litigation which the bill seeks to bring down.

The committee is scheduled to meet more industry chambers tomorrow, including PHDCCI and Assocham. Select committee is a temporary committee, which is set up to examine a particular bill.

Finance Minister Nirmala Sitharaman tabled the Income-Tax Bill, 2025 in Lok Sabha on February 13, in line with the announcement in the budget. The Bill aims at simplifying the income tax law, repealing the Income Tax Act, 1961. The new act will come into force from April 1, 2026.

“The Income-tax Act passed in 1961 has been subjected to numerous amendments since its passage sixty years ago. As a result of these amendments the basic structure of the Income-tax Act has been overburdened and language has become complex, increasing cost of compliance for taxpayers and hampering efficiency of direct-tax administration,” said the statement of objective of the bill.