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Informist, Friday, Mar. 20, 2026

 

--Sitharaman: Urge tax department to reduce litigation aggressively

--Sitharaman: Urge tax department to use technology to curb evasion 

--CONTEXT: Sitharaman at launch of Awareness Campaign on Income Tax Act, 2025

 

NEW DELHI - Finance Minister Nirmala Sitharaman Friday urged income tax department to work on reducing litigation and using technology to curb tax evasion. "My expectation (is to) reduce litigation aggressively. With clearer provisions, there should be a measurable reduction in cases," she said at launch of awareness campaign on Income-tax Act, 2025.

 

In August, the government had said it had tax arrears to the tune of a whopping INR 47.52 trillion under direct taxes. Of the pending direct tax arrears, an amount of INR 31.26 trillion was locked up in litigation till the end of March 2025.

 

Sitharaman said tax department needs to see taxpayers as partners and not adversaries so that it helps in building trust. "But those who are wilfully evading, those who are deliberately trying to get away, technology must catch them, but you should have the technology," she said.

 

She said the new Income Tax Act should be treated as a fresh start for tax mechanism and the department must avoid burdening it with amendments overtime. Earlier today the government notified Income-tax Rules, 2026.

 

Parliament had passed the Income-Tax Act in August, after incorporating most of the recommendations made by a select parliamentary committee. The law, first announced in the full Budget for 2024-25 (Apr-Mar), aims to simplify the Income Tax Act, 1961, to make it easier for taxpayers to calculate their tax dues and file returns. 

 

The main objective of the Act is to simplify the Income-tax Act, 1961, and make it easy to understand, read, and implement, the government had said. No new taxes have been introduced through the bill, the government had also said.

 

The Income Tax Department released the Draft Income-tax Rules, 2026 in February, along with draft forms to implement the Income-tax Act from Apr. 1. Under the new Income Tax Act, the number of forms has been reduced from 399 to 190. The government also reviewed the forms filled out on paper and made provisions to digitise them as well.  End

 

Reported by Sagar Sen

Edited by Akul Nishant Akhoury

 

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