Income Tax dept not an adversarial entity, but participative: CBDT chief

CBDT chairman Ravi Agrawal said the tax administration is committed to 'fostering stability and simplifying business operations' in India

Central Board of Direct Taxes (CBDT) chairman Ravi Agrawal has said the Income Tax department has transitioned from an adversarial entity to one that adopts a more participative approach. Speaking at a Federation of Indian Chambers of Commerce and Industry (FICCI) event on Monday (February 3), Agrawal highlighted this shift, saying that the department now operates under the guiding principle of "trust first".  

 

Agrawal further said the tax administration is committed to "fostering stability and simplifying business operations" in India. He also noted that governance in direct taxation has undergone a transformation, with policies increasingly focused on ensuring transparency and enhancing the ease of doing business. 

 

"Finance Minister Nirmala Sitharaman also reinforced this approach in her Budget speech, where she outlined the government's vision of prioritising trust in tax administration before resorting to scrutiny," said Agrawal.

 

'PRUDENT' framework, key reforms  

 

Agrawal also spoke about the I-T department's evolving strategy, describing it as "proactive, rule-based, and data-driven." On the occasion, he introduced the PRUDENT framework -- which stands for Proactive approach, Rule-based policies, User-friendly systems, Data-driven decision-making, an Enabling environment, Non-intrusive tax administration, and Technology-driven transparency. This approach, according to him, ensures that tax processes remain fair, predictable, and business-friendly.  

 

The CBDT chairman also highlighted recent reforms aimed at simplifying tax compliance. Key measures include the rationalisation of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), reducing the number of rates, optimising thresholds, and decriminalising specific offences. These initiatives are intended to create a more seamless tax compliance experience for businesses and individuals, he said.

 

Additionally, he noted that provisions for start-ups and International Financial Services Centres (IFSC) have been expanded to support innovation and economic growth.  

 

Concluding his address, Agrawal encouraged stakeholders to share their suggestions with the department. He assured them that all recommendations would be given due consideration. "The department is committed to delivering an Income Tax Act that is straightforward and easy to comply with," he said.