CBDT Chief: Budget Cuts Tax Litigation, Simplifies Compliance for Citizens

These measures include integrating assessment and penalty proceedings into a single process, a move expected to significantly reduce the time and resources taxpayers expend.

Speaking exclusively with ANI, CBDT Chairman Ravi Agrawal stated, "You see in this budget, some very substantial significant proposals are there which aim at reducing litigation going forward because this has been an area of concern."

He explained that the department has combined the assessment and penalty proceedings into a single process.

"So immediately the proceedings get reduced to half. So, therefore, now going forward, the assessment and the penalty proceedings would be taken together," Agrawal added.

CBDT Chairman said, as a result of several administrative measures that have been taken, including putting more officers on the appellate duties this year till January 31, "we have been able to dispose of 40% more appeals" as compared to the corresponding period last year.

Last year, till the 31st of January, we disposed of around 1.08 lakh appeals, but this year we have already disposed of 1.5 lakh appeals. The number of pending appeals as of 1st April was about 5.4 lakh; it has now been reduced to 4.9 lakh.

The Chairman noted that the new Income Tax Act 2025, which takes effect on April 1, 2026, focuses on simplifying language to improve compliance. He noted that the Act's length has been reduced by half to make it easier for people to understand.

"When this clarity and certainty are for both taxpayers and our officers, then the scope for misinterpretation will reduce, and compliance will increase," he said.

Furthering the objective of reducing litigation, the budget proposes giving multiple opportunities for taxpayers to accept departmental findings at different stages of assessment.

"In the case of late filing of audit reports, etc., in case the taxpayer comes forward, then the taxpayer is saved from the penalty proceedings; he pays a bit more tax, and the matter can be closed there," Agrawal said. Additionally, several provisions have been decriminalised, replacing jail terms with fines to encourage resolution over litigation.

Regarding taxpayer convenience, the CBDT has simplified the submission of Form 15G and 15H, particularly benefiting senior citizens. These forms can now be submitted to a single depository, which will then make the information available to various entities, he said.

The CBDT Chairman also noted the rationalisation of TCS rates for remittances abroad regarding education and medical purposes. "Essentially, that will bring more liquidity in the hands of the taxpayers," Agrawal said.

Regarding the tax base, he noted that nudge campaigns and the expansion of the updated returns window have resulted in 1.11 crore updated and revised returns filed over the last two years. This has resulted in tax collections exceeding Rs 8,000 crore from this expanded base.

The department remains confident of meeting the revised target of Rs 24.21 lakh crore for the current financial year. "Presently, we are as per the collections till now the growth rate is about 9.4 per cent so which is more than the asking rate and therefore we are confident that we would be able to meet these targets," the CBDT Chairman noted.

- ANI