Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Friday outlined the 5Rs of Responsive Tax Governance—Recognise, Respond, Redress, Reflect and Reform—while calling for greater tax certainty and reduced litigation to strengthen taxpayer confidence and support India’s economic growth.
Addressing the 167th Income Tax Day celebrations organised by the Central Board of Direct Taxes (CBDT) in New Delhi, the Finance Minister said the role of the Income Tax Department has evolved beyond revenue collection to building a fair, efficient, transparent and taxpayer-centric tax administration.
She described the implementation of the Income-tax Act, 2025 as a landmark reform that simplifies tax laws, reduces compliance costs and strengthens the ease of doing business. She also highlighted improvements in the e-Filing portal, faster return processing, timely refunds and enhanced grievance redressal.
Emphasising that grievance resolution should move beyond addressing individual complaints, Sitharaman urged the Department to identify recurring issues and implement systemic reforms to prevent them. She said honest taxpayers should experience convenience, receive opportunities to rectify bona fide errors and interact with a tax administration that exercises its authority with humility.
The Finance Minister also stressed the need to strengthen institutional capacity through modern infrastructure, technology adoption and continuous investment in human resources. She called for capacity building in emerging areas such as artificial intelligence, data analytics, forensic accounting, international taxation, transfer pricing, digital assets, cybersecurity and leadership development.
She urged the Department to further simplify compliance, promote voluntary tax compliance, strengthen tax certainty, responsibly harness technology and reinforce public trust while contributing to the vision of Viksit Bharat.
Speaking on the occasion, Revenue Secretary Arvind Shrivastava described the Income-tax Act, 2025, along with the new Income-tax Rules and Forms, as landmark reforms towards a simpler, clearer and more taxpayer-friendly tax system. He said the Department should continue leveraging technology while ensuring taxpayers remain at the centre of reforms.
CBDT Chairman Ravi Agrawal highlighted the Department’s progress over the past year in reducing litigation, speeding up the disposal of appeals and improving tax certainty through Advance Pricing Agreements (APAs). He also noted improvements in return processing, refunds, grievance redressal and taxpayer outreach through initiatives such as PRARAMBH and Samvaad.
Highlighting the Department’s technology-driven transformation, Agrawal said initiatives including PAN 2.0, Income Tax Business Application (ITBA) 2.0, IEC 3.0, Kar Saathi and the SAKSHAM NUDGE framework have helped simplify compliance, improve taxpayer services and strengthen voluntary compliance.
On the occasion, the Finance Minister released six flagship publications of the Income Tax Department, including the inaugural Annual Report of the Foreign Tax and Tax Research (FT&TR) Division, the Manual on Exchange of Information, updated guidance on FATCA and the Common Reporting Standard (CRS), India’s first Guidance Note on Crypto Asset Reporting Obligations, the Annual Report of the Advance Pricing Agreement Programme, and Re-engineering Tax Governance, which documents the Department’s transition to a technology-driven, taxpayer-centric digital ecosystem.
Four short films showcasing the history of taxation, the Karmyogi Shiksha Path Portal, the Department’s achievements during FY 2025–26, and initiatives to modernise taxpayer communication were also screened during the event.
