Good News for Salaried Employees: Government to simplify TDS refund process

The Central Government is planning a major change in the Income Tax Act, which will be part of the upcoming Income Tax Bill 2025. Now, those who earn less than the amount that needs to be taxed won’t have to fill out the full Income Tax Return (ITR)

New Delhi: There is some good news for people who are saleried employees. The government is trying to make the process of getting a tax refund easier and quicker. Now, those who earn less than the amount that needs to be taxed won't have to fill out the full Income Tax Return (ITR) just to get back the TDS that was deducted from their salary, report Dynamite News correspondent.

The Central Government is planning a major change in the Income Tax Act, which will be part of the upcoming Income Tax Bill 2025. As per this new proposal, people whose income is below the taxable limit but had TDS deducted from their salary will be able to get their refund by filling out a simpler form.

How Will New System Work?

At the moment, even if someone's income is not taxable, they still have to file the full ITR form if their company deducted TDS.

This process is slow and needs some technical know-how, which makes many people avoid claiming their refunds altogether.

Now, the CBDT (Central Board of Direct Taxes) is creating a new form that will automatically get the TDS information from the data in Form 26AS. This will let the taxpayer fill in just a few basic details and be eligible for a refund.

Who will Get Benefit?

This new proposal will especially help taxpayers whose annual income is ₹12. 75 lakh or less, especially those who choose the new tax regime. Sometimes, companies deduct TDS if the necessary documents are not submitted, making it a hassle to get the refund. Now, the process will be smooth and digital.

Data Access And Transparency

The committee also suggested that income tax officials should have access to digital devices and financial data of taxpayers to bring more transparency to the tax system. This new rule may start from April 1, 2026, after the Budget 2025-26 is passed.

Last Date To File ITR?

This time the deadline to file ITR has been kept on 15 September 2025. A person who will file his ITR within this fixed deadline can get the benefit of a refund on time. After the deadline, there will be an option to file a belated ITR, If you miss the ITR filing due date, you will still have to pay the late fee and interest charges, and you will not be allowed to carry forward any losses for future adjustments.