Union Finance Minister Nirmala Sitharaman has directed the Central Board of Direct Taxes (CBDT) to identify and withdraw all departmental tax appeals that fall below the revised monetary thresholds announced in the Union Budget 2024-25. A strict three-month deadline has been set for compliance.
The move is part of a broader initiative aimed at reducing legal clutter, easing the burden on taxpayers, and strengthening the overall efficiency of tax administration. "Good policies alone are not enough, what matters is timely execution," Sitharaman said while addressing senior tax officials during the 166th Income Tax Day celebrations on July 24.
Under Budget 2024-25, the monetary thresholds for departmental appeals were raised significantly:
- For the Income Tax Appellate Tribunal (ITAT): from Rs 50 lakh to Rs 60 lakh
- For High Courts: from Rs 1 crore to Rs 2 crore
- For the Supreme Court: from Rs 2 crore to Rs 5 crore
These changes have already led to the withdrawal of 4,605 appeals, and in 3,120 cases, appeals were not filed due to falling below the updated limits. The revised thresholds have allowed courts to prioritize higher-value disputes, aligning with the government's goal of faster and more focused litigation outcomes.
Out of the 5.77 lakh total pending tax appeals, over 2.25 lakh cases have been identified for resolution in FY 2025-26. These cases collectively involve more than Rs 10 lakh crore of disputed tax demand. The finance minister urged the CBDT to conduct region-wise performance reviews, expedite the disposal of pending disputes, and analyse root causes of litigation pendency to craft long-term solutions.
Sitharaman also lauded the CBDT's work on redrafting the Income Tax Bill, noting that 60,000 man-hours have been invested to simplify and modernize the legislation by reducing its length from five lakh words to nearly half-without compromising legal integrity. She described the effort as "spectacular."
Emphasising the importance of trust between the state and taxpayers, she added, "Let's reaffirm that contract. Let's earn the trust of the taxpayers." She called for seamless service delivery and proactive engagement to ensure a more taxpayer-friendly environment.
The government's fresh directive reflects its commitment to improving tax governance, reducing litigation backlog, and reinforcing taxpayer confidence through systemic reform and timely action.
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