Finance Minister Nirmala Sitharaman on July 24 urged the Income Tax Department to focus of ‘five R’s’ in a bid to improve tax payer services and ensure ease of doing business.
The five R’s are: recognise, respond, redress, reflect, and reform. “Recognise every taxpayer’s concern promptly, acknowledging that all grievances deserve timely attention. Respond with clarity, courtesy and empathy, ensuring taxpayers receive meaningful communication at each stage. And redress genuine grievances fairly and within defined timelines, delivering timely and reasoned resolutions,” the FM noted, during her speech at the 167th Income Tax Day.
Also, “reflect on the root causes of recurring grievances, using complaints as an opportunity for institutional learning; and reform the processes, systems and procedures continuously so that similar grievances become increasingly rare,” Sitharaman highlighted.
“Our approach should ensure convenience for the honest taxpayer, an opportunity to correct bona fide errors, and firm consequences for deliberate evasion,” she said, adding that the responsibility of the I-T Department has widened from a narrow focus on ‘tax collection’ to a broader commitment to fairness, efficiency, ease of doing business and service.
On the implementation of the Income Tax Act, 2025, the FM said that is has simplified the law by reorganising it, reducing uncertainty and lowering compliance costs.
Alongside this, the e-Filing portal has significantly strengthened this filing season with expanded computing capacity, storage, bandwidth and also network infrastructure, the FM said.
“These efforts enabled the portal to handle more than 1 crore taxpayer interactions in a single day, with daily interactions reaching around 1.6 crore at peak,” she added.
During the current filing season (as on July 21), more than 3.2 crore Income Tax Returns (ITRs) have been filed, nearly 94% verified, and 60% processed, Sithaman said. On this, over 1.3 crore refund claims have been received, 96% verified and 40% processed; so the Department must continue reducing processing timelines.”
Through Centralised Public Grievance Redress and Monitoring System (CPGRAMS), in the FY26, the Department disposed of 94% of the nearly 78,000 grievances received.
Average disposal time fell from 57 to 28 days, and grievances resolved within 21 days rose to 67 per cent, the FM said. “Through the e-Nivaran platform, 95% of the 3.5 lakh grievances were disposed, with average disposal time declining to 42 days.”
“Reduce the appeals”
During her speech, the FM called for reducing the number of appeals pending with the I-T Department.
She said the total pending appeals has declined by over 34,000 to now 5.4 lakhs. “No good. We should pause here. Are we doing this consciously?,” the FM noted.
The FM asked the CBDT to have a review to assess how the appeals’ issue can be handled.
“…we are allowing the mounting appeals to keep coming up, the newer ones coming up, even as the reduction is happening in a slower pace. I appeal to the board, CBDT, that you should have one more review to see how you’re going to handle this,” FM noted.
On tax certainty, the FM said that it is one of the strongest foundations of voluntary compliance. “Our long-term objective must shift from litigation management to litigation prevention”
“It should rest on three pillars: clarity in taxpayer obligations through timely circulars; consistency of interpretation across jurisdictions; and continuous Institutional Learning from appellate orders to inform future reform,” the FM said.
