Reforms in direct taxes ensure taxpayers can manage liabilities, reduce disputes: Revenue Secretary
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
Reader Comments
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. 🤞
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.
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.
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.
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. 👍
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.