Central Board of Direct Taxes - Latest Updates (April 2023)

The Union Finance Minister Nirmala Sitharaman recently chaired a review meeting with the Central Board of Direct Taxes (CBDT). The meeting covered a wide range of topics including the taxpayer base and the introduction of new TDS codes among other significant issues.

A detailed look at the discussed topics:

• The review meeting mainly focused on:
  • Expansion of the taxpayer base
  • Resolution of pending disciplinary proceeding cases
  • Disposal of applications for condonation of delay
  • Grant of exemptions under certain sections of the Income Tax Act, 1961
• The introduction of new data sources in Statement of Financial Transactions (SFT) and information from GSTN has led to a significant rise in reported information. This has resulted in the addition of information of about 3 crore persons.
• The introduction of new TDS codes has resulted in an increase in total reported transactions in 2021-22 to 144 crore as compared to 70 crore in 2015-16.
• The Personal Income Tax (PIT) to GDP ratio increased from 2.11 in 2014-15 to 2.94 in 2021-22.

The way forward: The Finance Minister suggested that the CBDT should amplify and fortify its efforts to increase awareness among taxpayers about the provisions of the direct tax laws and their compliance to achieve the desired results.

What is the Central Board of Direct Taxes (CBDT)?

• The CBDT is a statutory body that was established under the Central Board of Revenue Act, 1963.
• It is the official financial action task force unit of India.
• The CBDT operates under the Department of Revenue which is a part of the Ministry of Finance.

The Central Board of Revenue, which was the apex body of the Income Tax Department, was initially in charge of both direct and indirect taxes. However, the board was divided in 1964 into the Central Board of Direct Taxes and the Central Board of Excise and Customs.

Structure of the CBDT

The Central Board of Direct Taxes comprises a Chairman and six members who deal with:

• Income Tax & Revenue
• Administration
• Legislation
• Audit and Judicial matters
• Investigation
• TPS & System

The Members of the CBDT are selected from the Indian Revenue Service (IRS) . They form the top management of the Income Tax Department.

Functions of the CBDT

• The CBDT is responsible for dealing with matters related to the levying and collection of Direct Taxes.
• It formulates various policies.
• It supervises the entire Income Tax Department
• It suggests changes in Direct Tax Enactments and tax rates.
• It proposes changes in the taxation structure in line with the Government policies.

Indian Economy is a crucial subject in UPSC Preparation as it is interconnected with other topics like International Relations and Current Affairs .

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