New Income Tax Bill 2025: Tax deadlines, belated return, revised return -- here's what the draft bill says

Finance Minister Nirmala Sitharaman is anticipated to introduce the new legislation in Parliament this Thursday. A draft of the Income-Tax Bill, 2025, has been released by the government, with plans to present it in Parliament on February 13. The primary objectives of this bill are to streamline tax regulations and update compliance procedures. 

The bill comprises 23 chapters, 16 schedules, and 536 clauses that address various tax provisions. The new Income Tax Law will be implemented by April 2026, as per the draft bill. 

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The deadline for filing income tax is a critical factor in tax compliance for all taxpayers. Presently, there are varying deadlines for filing ITR based on the category of income taxpayers. Several taxpayers are advocating for a permanent extension of the ITR filing deadline to allow for additional time to complete the filing process.

Here's what the draft bill says:

1. The income tax bill has maintained the current income tax return filing deadlines unchanged. It is expected that the new income tax bill will affirm the existing income tax return filing deadlines. 

2. Certain categories of taxpayers have specific deadlines for filing income tax returns. 

3. Individuals and other taxpayers who are not required to have their accounts audited must submit their original ITR by July 31 of the assessment year. For those taxpayers whose accounts are subject to audit, the audit report must be submitted by September 30 of the assessment year. Following the submission of the audit report, taxpayers must file their ITR by October 31 of the assessment year.

4. Taxpayers whose accounts must undergo auditing are required to submit their audit report by September 30 of the assessment year. Following the submission of the audit report, taxpayers are then obligated to file their Income Tax Return (ITR) by October 31 of the assessment year.

5. Taxpayers engaging in international transactions are required to submit their audit report by October 31 of the assessment year. Subsequently, the Income Tax Return (ITR) must be filed by November 30 of the assessment year. The assessment year pertains to the financial year in which the income was earned.

6. In the event that an individual misses the initial deadline for filing their ITR, they have the option to submit a belated return. According to current income tax regulations, the deadline for a belated return is December 31 of the assessment year.

7. Likewise, if errors were made in the original or belated ITR, individuals have the opportunity to file a revised return. The deadline for submitting a revised return is also December 31 of the assessment year.

8. An individual may incur a penalty of up to Rs 5,000 for filing a late return as stipulated in Section 234F of the Income Tax Act.

9. The recent income tax bill does not introduce any additional penalties or fees for late tax filing.

As per the regulations outlined in the proposed Income Tax Bill 2025, taxpayers are required to settle their self-assessment tax prior to submitting their income tax returns.
Failure to file on time will result in:

• Interest charges of 1% per month
• Late fees of Rs 5,000 for individuals with incomes below Rs 5 lakh, and Rs 1,000 for others.

Other highlights

The upcoming law will have 16 schedules, an increase from the current 14 schedules. Despite this, the number of chapters will remain at 23.

The total number of pages will be reduced to 622, almost half the volume of the current Act, which has accumulated amendments over the past sixty years. For comparison, the original Income Tax Act of 1961 totaled 880 pages.

Under the new law, the CBDT will have the authority to establish tax administration rules, implement compliance measures, and enforce digital tax monitoring systems without the need for frequent legislative changes, as outlined in Clause 533.

This legislation marks the sixth income tax bill in Indian history and will replace the existing Income Tax Act of 1961. Once the bill is enacted, it will be known as the ‘Income Tax Act, 2025’.