Under new rules and forms under new I-T Act, the focus is on auto populating more data, CBDT Chairman Ravi Agrawal says
CBDT Chairman Ravi Agrawal
The CBDT (Central Board of Direct Taxes) Chairman Ravi Agrawal said on Thursday that work is in progress to rationalise the requirement of Form 60. He said that under new rules and forms under new Income Tax Act, the focus on auto populating more data.
Edited excerpts:
What is the plan for litigation management?
It is a priority area and we have made some notable progress. We started this year with a pendency of 5.4 lakh at the first appellate stage, and we have disposed of 1,53,000 cases between April-January this fiscal against 1.08 lakh during the corresponding period of the last fiscal, a reduction of 40 per cent. In this year’s Budget, some fundamental changes have been made to curb pendency, minimise litigation and move towards dispute resolution. The first step to minimise litigation involves clubbing together two separate proceedings — assessment and penalty — into one. Till now, there was a whole process involving first assessment and the appeal process that would take about 4-5 years. This was followed by penalty proceedings, which would typically take about 7-8 years, and then further appeals. By clubbing these proceedings, the litigation number has been halved or near-halved. The second step has a dispute resolution component, which also leads to litigation. An additional window has been provided now to the taxpayer that even after notice, if the person feels that he/she can pay some additional tax and close the issue, that opportunity has been provided.
Even after the assessment has been completed, the taxpayer now has an option to pay additional tax and close the proceeding. We believe the taxpayers may prefer to get resolution at an early stage instead of appeals. This also reduces the number of appeals.
How will the safe harbour provision in the Budget impact FDI?
India is an attractive country for the software industry. There was element of uncertainty so far about safe harbour provisions as they were categorised into different verticals. One category was IT-ITES, the other was knowledge processing outsourcing (KPO) and the third was contract R&D. Each of these had different rates. The rate for contract R&D, KPO was 18-24 per cent and 17 per cent for IT-ITES. There was always an apprehension that if they come for safe harbour, the department might recognise them interchangeably — say it is not IT-ITES but KPO, or part of it is IT-ITES and part of it KPO. Basically, there was no certainty in the system. All these categories have now been brought into one umbrella, and the rate has been kept as 15.5 per cent. That brings a lot of clarity and certainty for the software industry. This will have an impact on the FDI as well.
Can you share some details of the new rules and forms based on new Income Tax Act 2025?
They’ve not been notified, so I will not be giving you specifics. But I can talk about the general philosophy with some examples. We have leveraged on the processes adopted by agencies outside the department. For example, when a person opens a bank account and if he/she does not have a PAN, files a Form 60. This was the requirement when the banks were not in the CBS and the processes were largely manual in nature. The banks have now been computerised. They are capturing the data attributes of the persons concerned. Therefore, can the Form 60 requirement be rationalised? We are working towards that.
Another element is audit reports. Audit is completed and at the same time, return is also filed. Can that audit report be designed in a manner that some component of it gets pre-populated in the return itself, so that there is a consistency between the audit report and the returns? Essentially, the idea is that the forms you give to the taxpayer are actually are smart forms, which capture only relevant data. Where irrelevant data is identified, it should be excluded. Remaining data points must be converted into a format that supports meaningful analysis, moving beyond mere data collection. Can information reported through one form be auto-populated or included in another form to ensure consistency between different forms, particularly the audit report and ITR form?
What is the big message to the taxpayer in this Budget?
The tax department has adopted a new mantra focused on taxpayer trust, supported by simpler forms, streamlined rules and structural reforms. We encourage taxpayers to embrace this shift; when income is reported accurately, the need for enforcement diminishes. By choosing collaboration over confrontation, we aim to provide the certainty and clarity that naturally drive compliance. Once this foundation is established, we can focus our collective energy on more complex strategic issues.
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