FM Sitharaman Unveils 5Rs of Responsive Tax Governance

• Finance Minister Nirmala Sitharaman outlined the 5Rs of Responsive Tax Governance.
• Called for a fair, transparent and taxpayer-centric tax administration with reduced litigation.
• Highlighted the Income-tax Act, 2025 as a landmark reform simplifying compliance.
• CBDT showcased technology-driven initiatives including PAN 2.0, ITBA 2.0 and SAKSHAM NUDGE.

GG News Bureau
New Delhi, 25th July: Union Finance and Corporate Affairs Minister Nirmala Sitharaman outlined the 5Rs of Responsive Tax Governance—Recognise, Respond, Redress, Reflect and Reform—while calling for greater tax certainty, reduced litigation and a more taxpayer-centric administration during the 167th Income Tax Day celebrations organised by the Central Board of Direct Taxes (CBDT) in New Delhi.

Addressing officers and officials of the Income Tax Department, the Finance Minister said the Department’s role has evolved beyond tax collection to building a fair, efficient, transparent and taxpayer-friendly tax administration. She emphasised that honest taxpayers should experience convenience, have opportunities to correct genuine errors and interact with an administration that exercises its authority with humility.

Sitharaman described the Income-tax Act, 2025 as a landmark reform that has simplified tax laws, reduced compliance costs and strengthened the ease of doing business. She also highlighted improvements in the e-Filing portal, faster return processing, prompt refunds and enhanced grievance redressal mechanisms.

The Finance Minister stressed that the Department should move beyond merely resolving complaints to identifying recurring issues and introducing systemic reforms to prevent them. She urged officials to deepen voluntary compliance, simplify taxpayer services, strengthen institutional excellence and responsibly leverage technology while reinforcing public trust.

Calling taxpayers partners in India’s development journey, Sitharaman said reducing litigation through greater tax certainty should remain a key priority. She also underscored the need to strengthen institutional capacity by investing in modern infrastructure, technology and specialised skills in areas such as artificial intelligence, data analytics, forensic accounting, international taxation, transfer pricing, digital assets and cybersecurity.

Revenue Secretary Arvind Shrivastava termed the implementation of the Income-tax Act, 2025, along with the new Income-tax Rules and Forms, as landmark reforms towards creating a simpler, clearer and more taxpayer-friendly tax system. He called for continued focus on ease of compliance, innovation and technology-driven service delivery to support the vision of Viksit Bharat 2047.

CBDT Chairman Ravi Agrawal highlighted the Department’s achievements over the past year, including faster income tax return processing, quicker disposal of appeals, timely refunds, improved grievance redressal and progress in reducing tax litigation through initiatives such as Advance Pricing Agreements (APAs).

He also showcased technology-led reforms, including PAN 2.0, ITBA 2.0, IEC 3.0, Kar Saathi and the SAKSHAM NUDGE framework, aimed at simplifying compliance, improving taxpayer experience and promoting voluntary tax compliance.

During the event, the Finance Minister released six flagship publications of the Income Tax Department covering international taxation, exchange of information, crypto asset reporting, the Advance Pricing Agreement programme and the Department’s digital transformation journey. Four short films highlighting the history of taxation, taxpayer communication and the Department’s achievements during FY 2025-26 were also screened as part of the celebrations.