Clipped from: https://www.financialexpress.com/business/news/tax-matters-reaching-courtsnbspsignal-systemic-failure-fm/4179351/
Finance Minister Nirmala Sitharaman has launched Income Tax Website 2.0 and the ‘Prarambh 2026’ campaign, urging tax officials to aggressively reduce litigation under the New Income Tax Act 2025.
Nirmala Sitharaman: The Taxpayer is a Partner, Not an Adversary in the New Income Tax Act 2025
Finance Minister Nirmala Sitharaman on Friday stressed that litigation must be reduced under the new Income Tax Act, 2025. She added that the revamped law must simplify compliance for taxpayers and harness technology to detect tax evasion.
Sitharaman described every matter that reaches a tribunal or court as a systemic failure rather than a point of pride for the tax department. Officials have been directed to make full use of the clearer provisions in the new act to resolve pending disputes wherever feasible and refrain from launching frivolous or unnecessary proceedings.
“You’re not just tax collectors. You’re the face of the government’s relationship with the taxpayer. The taxpayer is not your adversary. The taxpayer is your partner in nation building. Reduce litigation aggressively. Provide clarity and justify the demand that you have put forth,” Sitharaman said.
Speaking at the launch of the Income Tax Website 2.0 and the awareness campaign ‘Prarambh 2026’, the Finance Minister said the new act will bring relief to small businesses and professionals as the presumptive taxation scheme has been strengthened. Businesses with turnover up to Rs 10 crore, provided their cash receipts are below 5%, are now exempt from maintaining detailed books and undergoing tax audit, she said.
The minister also urged extensive use of technology to eliminate the need for human interaction in routine matters unless absolutely essential, and to ensure prompt and efficient handling of queries. Technology must also serve as a powerful tool to curb wilful evasion, Sitharaman said. While the system should make compliance so convenient that honesty becomes a natural choice, those who deliberately attempt to evade taxes must face swift detection through data analytics, AI-driven risk profiling, and seamless information sharing across government systems, the minister said.
The minister also highlighted the importance of proactively engaging with the youth. She proposed bringing young professionals such as technologists, economists, data scientists, chartered accountants, and legal researchers into Central Board of Direct Taxes projects on a structured basis to contribute to tax administration reform and advanced analytics.
The cautioned officials and policymakers against the temptation to keep adding “just one more provision” or “just one more exemption” to the law. “This new Act must remain simple.” It must remain clear. We should not allow it to become as complex as the earlier version,” Sitharaman said.
The minister called for a massive nationwide awareness drive through the “Samvaad” sessions, designed to reach far beyond metropolitan areas and Tier-1 cities. She said that the implications of the new law must be understood by taxpayers in every district and tehsil.
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