Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has called upon Income Tax Department officials to be fully prepared and proactive for the transition to the new direct tax regime, scheduled to come into force from April 1, 2026. Emphasising clarity, readiness and purpose, he said the coming months would be crucial in ensuring a smooth shift to the Income Tax Act, 2025.
In his customary New Year message to department staff, Mr. Agrawal described 2026 as a year of "special significance" for the tax administration, as the new law will replace the six-decade-old Income Tax Act, 1961. He informed officials that new rules, procedures and statutory forms are currently being formulated to facilitate the transition.
Training, Capacity Building Already Underway
According to a report that accessed the communication, the CBDT chief said training and capacity-building initiatives have already begun to familiarise officers with the structure, intent and operational framework of the new law. He stressed that active involvement in training would enable officers to guide taxpayers with confidence and clarity during the transition phase.
"Your involvement and curiosity will shape how smoothly we make the transition," Mr. Agrawal wrote, urging officials to deepen their understanding of the new legislation.
Shift Towards Trust-Based Tax Administration
Highlighting the evolving role of the Income Tax Department, the CBDT chairman said tax administration is moving beyond revenue collection and enforcement towards facilitation, trust and service delivery. He noted that technology and data-driven systems would play a central role in aligning departmental processes with the new legal framework.
Mr. Agrawal also underlined the importance of familiarity with automated processes and data platforms, particularly for younger officers who will lead the department in the coming years.
Focus on Grievance Redressal and Voluntary Compliance
Reflecting on the department's performance in 2025, Mr. Agrawal said the organisation functioned under close oversight of grievances, rectification requests and pending appeals, despite demanding timelines. He lauded the resilience and sincerity of tax officials across the country.
The CBDT chief further asked officers to strengthen behavioural tax administration through the NUDGE framework (Non-intrusive Usage of Data to Guide and Enable) to encourage voluntary compliance using better data analytics.
Commitment to Integrity and Continuous Learning
Pointing to changing business models and transaction patterns, Mr. Agrawal said emerging financial complexities require continuous learning and sharper analytical capabilities. He reiterated that integrity, professionalism and day-to-day decision-making by tax officials form the backbone of India's financial architecture.
"As 2026 unfolds, may we work together with diligence, clarity and purpose," he said, reinforcing the department's commitment to a smooth and taxpayer-friendly transition to the new direct tax law.
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