New Delhi: People whose TDS is deducted on their income but do not have any tax liability can get a refund in the future even without filing an Income Tax Return (ITR). On a public interest litigation (PIL) filed regarding this demand, the Delhi High Court has issued a notice to the Central Government and sought its response. The petition states that an automatic TDS refund system should be implemented for such taxpayers so that the compulsion to file ITR just to get the refund can be eliminated.
Which rule has been challenged in the High Court?
Section 433 of the Income Tax Act, 2025 has been challenged in the petition. As per the current rules, it is necessary to file an income tax return to get a TDS refund. The petitioner argues that there is no justification in filing returns just to get a refund from people who do not have any income tax liability and who are not mandated to file ITR under the law.
What has the Delhi High Court said?
The bench of Chief Justice Devendra Kumar Upadhyay and Justice Tejas Karia has issued a notice to the central government seeking its response on this matter. The court has fixed the next hearing of the case on November 6, 2026. At present, the court has not given any interim relief but has asked the government to clarify its stand on this arrangement.
What changes have been demanded in the petition?
The petitioners want the Central Government and the Central Board of Direct Taxes (CBDT) to create an automatic system under which TDS refunds are sent to the bank accounts of eligible people without filing ITR. He says that the government already has complete records related to PAN, Aadhaar, Form 26AS and TDS available, so it is not difficult to identify eligible taxpayers.
Who can benefit most from this decision?
If this demand is approved in the future, its biggest benefits could be to senior citizens, low-income employees, blue-collar workers and those whose tax liability is zero but TDS is deducted from their income. Many such people go through the process of filing ITR just to get a refund of a few thousand rupees, while many are unable to complete the process at all.
Why were 2.35 crore people mentioned in the petition?
Citing Income Tax Department data, the petition claims that about 2.35 crore people had TDS credit registered in their names but did not file income tax returns. The petitioner says that a large number of these may be people who had no tax liability and who could have been entitled to a refund. The petition also states that the parliamentary committee had also recommended removing the requirement of ITR for small taxpayers, but it was not included in the final law.
Can taxpayers get TDS refund now without filing ITR?
At present, there is no answer to this. There has been no change in the existing rules. Unless the court or the central government takes a new decision in this regard, in cases where filing an income tax return is mandatory, ITR will have to be filed to get a TDS refund. That means, for now, taxpayers will have to complete the process as per the existing system.
