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Budget 2026 Tax Reforms Empower Taxpayers, Reduce Disputes: Revenue Secretary

The Revenue Secretary has detailed direct tax reforms from the Union Budget 2026 aimed at creating a more taxpayer-friendly system. Key measures include extending the deadline for revising income tax returns and promoting the use of updated returns over a four-year period. On the customs front, the government is moving towards an entity-based system to streamline procedures for trusted businesses like AEOs. The overall goal is to reduce disputes, minimize administrative intervention, and empower taxpayers through clear and transparent policies.

Key Points: Budget 2026 Direct Tax Reforms for Easier Compliance

  • Extended ITR revision timeline
  • Four-year window for updated returns
  • Shift to entity-based customs systems
  • Reduced physical inspections for trusted entities
  • Emphasis on transparency and clarity
2 min read

Reforms in direct taxes ensure taxpayers can manage liabilities, reduce disputes: Revenue Secretary

Revenue Secretary outlines key direct tax reforms in Budget 2026, focusing on extended return timelines, updated returns, and a shift to trust-based systems.

"These measures ensure that taxpayers can proactively manage their liabilities, reduce disputes, and retain greater control over their assessments. - Arvind Shrivastava"

New Delhi, February 2

The reforms in direct taxation announced in the Union Budget 2026 ensure that taxpayers can proactively manage their liabilities, reduce disputes, and retain greater control over their assessments, said Arvind Shrivastava, Secretary, Department of Revenue, Ministry of Finance on Monday.

While speaking at a post-Budget interactive session organised by the Confederation of Indian Industry (CII), the Secretary highlighted key reforms in direct taxation, and noted that the timeline for revising income tax returns has been extended by one quarter, giving taxpayers additional time to voluntarily correct errors.

He also pointed to the growing use of updated returns, which allow taxpayers to disclose new or missing information over a four-year period.

"These measures ensure that taxpayers can proactively manage their liabilities, reduce disputes, and retain greater control over their assessments," he said.

He said the Union Budget 2026-27 aims to strengthen a taxpayer-friendly, trust-based system by translating policy vision into practical and transparent measures.

"The Budget proposals are designed to empower businesses and taxpayers to manage their tax affairs independently while reducing disputes and administrative intervention," he said.

On the customs, Shrivastava said the government is shifting from transaction-based rules to entity-based systems.

"Under this approach, Accredited Economic Operators (AEOs) and eligible manufacturers will receive preferential treatment, including electronic sealing of exports and simplified customs procedures. The move is expected to reduce physical inspections, improve efficiency, and streamline compliance for businesses," he said.

Emphasising transparency and clear communication, the Secretary urged industry and taxpayers to avoid speculation around Budget proposals.

"The government has ensured that proposals are drafted with clarity, and the department is actively supplementing and clarifying measures wherever needed. Constructive engagement will ensure that the intent and spirit of these reforms is fully realised on the ground," he said.

- ANI

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Reader Comments

R
Rohit P
Trust-based system sounds good on paper. But the ground reality for small business owners like me is still lots of notices and queries. Reducing "administrative intervention" is key. Let's see if these simplified customs procedures actually mean less harassment at ports. 🤞
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Aman W
The updated return window of four years is a double-edged sword. Good for honest disclosures, but could also lead to uncertainty for businesses doing long-term planning. Clarity in law is most important to avoid future litigation. The Secretary's point on avoiding speculation is crucial.
S
Sarah B
Working with Indian exporters, the shift to entity-based systems for AEOs is a significant positive. Electronic sealing and fewer physical inspections will cut down delays dramatically. This is a practical reform that boosts 'Ease of Doing Business'. Hope the implementation is swift.
K
Karthik V
While the intent is good, I respectfully disagree that taxpayers have "greater control." The power dynamic is still heavily skewed towards the department. True empowerment would come from limiting the scope of reopening old assessments. Proactive management is easier said than done for the common man.
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Nisha Z
More than the policies, it's about the mindset change. If the frontline tax officers are trained and incentivized to be facilitators rather than enforcers, only then will a "taxpayer-friendly" system become a reality. The reforms are a step in the right direction, though. 👍

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