Small taxpayers in India may soon get a significant relief. The requirement to file an Income Tax Return (ITR) just to claim a TDS (Tax Deducted at Source) refund may soon be removed. Instead, taxpayers may only need to fill out a simple form to get their refund.
A parliamentary committee reviewing the Income Tax Act 2025 has made this recommendation, and the government has reportedly accepted it. According to sources, the committee suggested that taxpayers who are not liable to pay income tax but have had TDS deducted should be exempted from filing an ITR just for claiming a refund. Instead, a simple refund claim form should be introduced to make the process easy.
Government Has Accepted the Proposal
It is being reported that the government has accepted this recommendation, and it will be implemented as part of the amendments to the Income Tax Act 2025. The CBDT (Central Board of Direct Taxes) has been tasked with creating a simple process or form for those who fall below the taxable income limit and only need to claim a TDS refund.
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How the New System Will Work
Instead of filing a full ITR, taxpayers will be allowed to submit a simple form. This form will be based on the TDS details shown in Form 26AS. Taxpayers can fill this new refund form using the data from Form 26AS and claim their refund easily from the Income Tax Department.
Under the new tax regime, if your annual income is up to ₹12.75 lakh and you have submitted all the necessary tax-related documents, you may not be required to pay any income tax. However, in many cases, banks or employers deduct TDS due to missing documents. As a result, people with non-taxable income still have to file ITR to claim their refund.
With this upcoming change, such individuals will no longer need to go through the hassle of ITR filing just for a refund—making the process simpler and more convenient.