CBDT releases Central Action Plan: Know Key Areas of Focus for FY 2025-26

The Central Board of Direct Taxes (CBDT) has officially released its Central Action Plan (CAP) for the financial year 2025–26, laying down the roadmap to reform direct tax administration, drive taxpayer-centric governance, and align with India’s larger vision of becoming a developed nation by 2047 (Viksit Bharat).

A Shift Towards ‘PRUDENT Karmayogis’

At the heart of this year’s CAP is the ‘PRUDENT Karmayogi’ framework — a philosophy that blends the principles of the CBDT’s PRUDENT approach with the Government of India’s Mission Karmayogi. This framework emphasizes:

• Professionalism

• Responsiveness and Responsibility

• Understanding of transactions and business dynamics

• Data-driven decision-making

• Enforcement with empathy

• Non-intrusive administration

• Technology-led processes

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Core Performance Areas

The CAP outlines specific objectives across multiple verticals of the Income Tax Department. Notable highlights include:

1. Revenue Mobilization: A total direct tax collection target of ₹25.2 lakh crore has been set for FY 2025–26, including ₹10.82 lakh crore from corporate taxes and ₹13.6 lakh crore from income taxes.

2. Arrear Demand Reduction: With outstanding demands exceeding ₹48 lakh crore, CBDT has introduced a score-based evaluation model to prioritize and reduce arrears. The plan assigns region-wise reduction targets amounting to ₹8.24 lakh crore.

3. Litigation Management: The department aims to dispose of over 2 lakh appeals involving disputed demands of ₹10 lakh crore, with focused efforts on legacy appeals, high-value disputes, and rapid disposal through newly empowered Joint Commissioners of Appeals.

4. Taxpayer Services: Emphasis is placed on adherence to the Taxpayers' Charter and timely grievance redressal via CPGRAMS and e-Nivaran. Targets have been set for processing refunds, rectifications, and appellate effects within defined timelines.

5. Human Resource Development: A mandate for all officials to undergo at least 50 hours of capacity-building training has been introduced. Specialized training modules will be delivered through the Karmayogi Bharat platform and National Academy of Direct Taxes (NADT).

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6. Tech-Driven Governance: The Directorate of Systems will lead modernization efforts through expanded use of faceless assessments, AI tools, digital dashboards, and seamless integration of taxpayer data for improved compliance and risk assessment.

7. Vigilance and Compliance Oversight: CAP 2025–26 also tightens internal governance with targets for timely APAR submissions via SPARROW, adherence to service-related timelines, and mandatory reporting under the POSH Act.

Senior officers — Pr. CCsIT, CCsIT, and DGsIT — have been tasked with driving policy implementation, monitoring tax collection, ensuring coordination across verticals, and mentoring their teams. The CAP also urges deeper engagement with taxpayers through outreach programmes, fostering a trust-based, voluntary compliance environment.

With its forward-looking and data-driven blueprint, the CAP 2025–26 marks a decisive step toward a more transparent, responsive, and technologically empowered tax administration system. The successful implementation of this plan is expected to significantly enhance public trust, boost compliance, and contribute to India's fiscal stability and development goals.

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