It Took 60,000 Man Hours to Draft the New Income Tax Bill: FM Nirmala Sitharaman

Speaking at the celebrations of the 166th Income Tax Day in New Delhi, Union Finance Minister Nirmala Sitharaman praised the Income Tax Department for its transformative reforms in recent years and urged officers to raise the bar further by strengthening taxpayer trust, accelerating dispute resolution, and modernizing infrastructure and systems.

Addressing officers, dignitaries, and media personnel, the Finance Minister recalled the historical roots of Income Tax Day, which traces back to 1860, and acknowledged the commendable work of several officers honored with service recognition certificates during the event. She gave special appreciation to the team that drafted the new Income Tax Bill, calling it a remarkable feat achieved with “60,000 man-hours” of effort and collaboration.

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“This is the first comprehensive review of the Income Tax Act since 1961,” she said, noting that the new bill is simpler, clearer, and more accessible. “You have reduced the number of words by half, simplified the language, and removed the need to cross-reference between chapters.”

Sitharaman highlighted that the new bill had already received informal praise from members of the Select Committee and was now placed before Parliament. She expressed hope that it would pass during this 166th year of Income Tax Day, becoming a historic reform milestone.

The Minister also reflected on key changes over the last five to six years, including the faceless assessment system, taxpayer charter, quicker refunds, use of AI and automation, and schemes like Vivad Se Vishwas aimed at dispute resolution. She acknowledged that officers had quickly adapted to these changes, disproving early doubts about internal resistance.

Referring to the year 2020, when the faceless system was introduced, she said, “People warned me that officers may not accept it. But today, it is your adaptability and service that are being appreciated across the country.”

Looking ahead, Sitharaman outlined five critical priorities for the Central Board of Direct Taxes (CBDT) and the Department of Revenue, based on the June 2025 review meeting with Principal Chief Commissioners:

1. Accelerate disposal of disputed tax demands pending before faceless appellate authorities.
2. Identify and withdraw departmental appeals falling below the revised monetary thresholds within three months.
3. Ensure timely processing of tax refunds and proactively resolve taxpayer grievances.
4. Analyze and address root causes of taxpayer grievances to prevent recurrence.
5. Conduct region-wise performance reviews using indicators like grievance disposal and delay in issuing orders giving effect (OGs).

On the issue of OG delays, Sitharaman expressed strong dissatisfaction: “It is unpardonable. If you can reduce a five-lakh-word law to half its size in three months, you can certainly issue OGs on time.”

She urged the CBDT and the Revenue Department to prioritize improvements in office infrastructure, staff housing, and equipment. She emphasized the need for better working and living conditions, especially in view of harsh commuting environments, and asked the board to submit a concrete calendar and action plan for upgrades.

“Good policies alone are not enough,” she stressed. “Timely execution is what matters. Income Tax Day is a moment to reaffirm the unsaid social contract between the state and the taxpayer. We cannot afford to let it fray.”

The Finance Minister concluded her address with a call to action: “Let’s raise the benchmark. You have adapted and performed with distinction. Now, let’s earn the trust of the taxpayers through our conduct.”

Her speech marked both a celebration of achievements and a pointed reminder of the road ahead for India’s tax administration.

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