The central government is continuously working to simplify and streamline the tax system, aiming to reduce disputes. In this direction, Union Finance Minister Nirmala Sitharaman has reportedly given strict instructions to the Central Board of Direct Taxes (CBDT) to identify all departmental tax appeals involving amounts less than the “revised monetary limit announced by the Central Government in Budget 2024-25” and withdraw them within three months.
This move is part of a comprehensive initiative to enhance the efficiency of tax administration, reduce the legal burden on taxpayers, and alleviate the judicial system of unnecessary disputes.
“Good policies are not enough in themselves, the real meaning lies in their timely implementation,” the Finance Minister said while addressing senior tax officials during the 166th Income Tax Day celebrations on July 24.
Budget 2024-25 makes major changes to the monetary limits for appeals:
- The limit for the Income Tax Appellate Tribunal (ITAT) has been increased from Rs 50 lakh to Rs 60 lakh
- The limit for High Courts has been increased from Rs 1 crore to Rs 2 crore
- The limit for the Supreme Court has been increased from Rs 2 crore to Rs 5 crore.
Since the implementation of these new limits, 4,605 appeals have been withdrawn and appeals were not filed in 3,120 cases as they fell below the new limits. This has allowed the courts to focus on high-value cases, which is in line with the government’s intent of a faster and more efficient judicial process.
Cases involve disputed tax demands of over Rs 10 lakh crore
A total of 5.77 lakh tax appeals are currently pending, of which 2.25 lakh cases have been identified for disposal in FY 2025-26. These cases involve disputed tax demands totalling over Rs 10 lakh crore. The minister urged the CBDT to review sector-wise performance, resolve pending disputes quickly and analyse the root causes of litigation to find long-term solutions.
New tax bill simplified with 60,000 man-hours; Sitharaman calls it “spectacular”
The finance minister also praised the work done by the CBDT on the draft of the new Income Tax Bill. She said 60,000 man-hours have been contributed to simplify and modernise it. The new bill, without any legal infirmities, has been reduced from its original five lakh words to almost half. She described this effort as “spectacular”.
Reiterating the spirit of trust between the state and taxpayers, she said, “Let’s reaffirm that contract. Let’s earn the trust of the taxpayers.” She also stressed on providing better services to taxpayers and maintaining active dialogue with them.
This new directive of the government clearly shows that its aim is to make tax administration more transparent, reliable and free from judicial processes – where taxpayers are facilitated and the trust of the common people in the country’s tax system is strengthened.
