Finance Minister Nirmala Sitharaman has directed the Income Tax Department to make tax administration more convenient for honest taxpayers while ensuring strict action against those who intentionally evade taxes. Speaking during the 167th Income Tax Day celebrations in New Delhi, she said the department's role has grown beyond tax collection and now includes ensuring fairness, efficiency, ease of doing business, and better taxpayer services. 
The minister said the Income Tax Department has evolved alongside India's economic growth over the past century and a half by adapting to changing economic and administrative requirements. She added that the implementation of the Income Tax Act, 2025 has simplified the country's tax framework by reorganising the law, reducing ambiguity and lowering compliance costs for taxpayers and businesses. 
Sitharaman also highlighted improvements made to the Income Tax Department's e-filing portal. According to her, expanded computing capacity, storage, bandwidth and network infrastructure have strengthened the ongoing return filing season. These upgrades enabled the portal to manage more than one crore taxpayer interactions in a single day, while daily interactions touched around 1.6 crore during peak periods. 
Sharing the latest filing data available until earlier this week, the Finance Minister said more than 3.2 crore Income Tax Returns (ITRs) had been filed. Around 94 per cent of these returns had been verified, while nearly 60 per cent had already been processed. 
She further informed that the department had received more than 1.3 crore refund claims. Of these, about 96 per cent had been verified and around 40 per cent had been processed. Stressing the need for faster processing, Sitharaman said the department should continue reducing processing timelines as prompt refunds strengthen taxpayer confidence in the fairness of the tax administration while also improving liquidity. 
While appreciating the department's performance, she said its achievements should not lead to complacency. Instead, she urged officials to adopt the five priorities of responsive tax governance Recognise, Respond, Redress, Reflect and Reform—to improve service delivery and strengthen public trust. 
The Finance Minister said tax authorities should distinguish between genuine mistakes made by taxpayers and deliberate tax evasion. She added that honest taxpayers should be provided with opportunities to correct bona fide errors, while intentional violations should invite firm action. She also emphasised that powers granted under tax laws must always be exercised with humility. 
According to Sitharaman, taxpayers should not be viewed merely as assessees but as citizens and partners in India's economic development. She noted that this approach is essential for encouraging voluntary tax compliance and strengthening the relationship between taxpayers and the government. 
The minister also placed strong emphasis on reducing tax disputes and increasing certainty in the tax system. She said the government's long-term objective should move beyond managing litigation towards preventing disputes altogether. Consistent guidance under the Income Tax Act, 2025 and regular engagement with taxpayers, professionals and industry would be necessary as India's fast-changing economy continues to raise new tax-related questions. 
She added that greater tax certainty is important not only for voluntary compliance but also for improving the ease of doing business and enhancing India's competitiveness as a global investment destination. The government has been working in recent years to simplify tax procedures through faceless assessments, digital services, quicker refund processing and legislative reforms aimed at making the tax system more transparent and predictable. 
Revenue Secretary Arvind Shrivastava said reducing tax litigation has remained a key focus of the government's reform agenda. He informed that the Income Tax Department disposed of 2.24 lakh appeals during the financial year 2025-26, marking a 30 per cent increase over the previous financial year. 
Shrivastava said the department has supported this objective through clearer legislative drafting, simplified procedural rules, greater use of technology and standardised processes to reduce ambiguity and minimise disputes. He added that specific measures have also been introduced to reduce litigation at the first appellate level, while further improvements are needed to ensure quicker resolution of tax disputes without compromising government revenue. 
Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said the department has made significant progress in grievance redressal by reducing the time taken to resolve taxpayer complaints. During the financial year 2025-26, the department handled 77,765 grievances received through the Centralised Public Grievance Redress and Monitoring System (CPGRAMS) and resolved 72,933 of them, achieving a disposal rate of 94 per cent. 
He added that the department also handled 343,269 grievances through the e-Nivaran platform, disposing of 326,217 cases and achieving a disposal rate of 95 per cent. Agrawal said the department has now started addressing the root causes of recurring complaints so that taxpayers face fewer issues in the future. 
Source PTI