Finance Minister Nirmala Sitharaman has directed officials to ensure convenience for honest taxpayers as the deadline to file Income Tax returns draws close. She also outlined five ‘priorities’ for responsive tax governance and urged the I-T department to ensure firm consequences for cases of deliberate evasion.
“The Income Tax Department should know how to draw a line between those deliberately evading tax and those committing bona fide errors. Tax certainty is an economic imperative…Exercise power that the tax law gives you with humility; please don’t overdo,” Sitharaman urged.
The Finance Minister added that the current income tax filing season had recorded significant milestones — with the e-Filing portal handling more than one crore taxpayer interactions in a single day after its computing capacity and bandwidth were enhanced. Peak interactions touched nearly 1.6 crore in a day. More than 3.2 crore Income Tax Returns had been filed by July 21, with over 94% verified and 60% processed.
The 5Rs of responsive tax governance
“Over more than a century and a half, the I-T Department has evolved alongside India’s economic transformation, continuously adapting to meet the changing needs of the nation…We should not rest on our achievements, however high they might be,” Sitharaman said during an event to mark the 167th Income Tax Day in Delhi.
She highlighted five priorities for the department and its officials — Recognise, Respond, Redress, Reflect and Reform — as guiding principles for taxpayer service. The Finance Minister noted that honest taxpayers should be given opportunities to correct bona fide errors and a tax administration that exercises its authority with humility. Sitharaman also called for a continued focus on reducing litigation by strengthening tax certainty.
“Tax certainty is one of the strongest foundations of voluntary compliance. Our long-term objective must shift from ‘litigation management’ to ‘litigation prevention’…Ultimately, tax certainty is an economic imperative that improves the ease of doing business and strengthens India’s competitiveness as a global investment destination,” she added.
CBDT reports sharp drop in tax appeals
The Central Board of Direct Taxes said on Friday that it had disposed of more than 2.24 lakh appeals during FY26 — far exceeding the 1.7 lakh new appeals that were filed during the year. CBDT Chairman Ravi Agrawal said nearly 6,000 departmental appeals were also withdrawn in line with revised monetary thresholds. Appeal-effect orders saw a 90.3% disposal rate, with 5.68 lakh of 6.29 lakh cases cleared during the year.
Agrawal reported that almost all verified returns for Assessment Year 2025-26 have now been processed. Of nearly 8.6 crore verified returns, only about 1.5 lakh remain pending. Of 3.82 crore verified refund returns, just 1.47 lakh are still pending, held up in risk assessment. He added that the department had also begun tackling root causes of recurring complaints to reduce grievances at source.
