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Last Updated:<\/span>October 10, 2025, 15:59 IST<\/time><\/p>\nIndia transitions from enforcement-driven compliance to trust-based governance, says B V R Subrahmanyam, CEO of NITI Aayog.<\/h2>\n\n
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\nNITI Aayog says such reforms will help reduce litigation, boost investor confidence, and create a fair, predictable tax regime aligned with global best practices.<\/p>\n<\/figure>\n
In a move aimed at deepening tax reforms and building a more transparent compliance framework, NITI Aayog on Friday released the second paper in its NITI Tax Policy Working Paper Series, titled \u2018Towards India\u2019s Tax Transformation: Decriminalisation and Trust-Based Governance\u2019.<\/p>\n
The paper, released by B V R Subrahmanyam, CEO of NITI Aayog, marks a significant step towards shifting India\u2019s tax ecosystem from enforcement-driven compliance to a trust-based governance model. Subrahmanyam said India\u2019s tax reforms are entering a \u201cdecisive phase marked by simplification, modernisation, and the integration of trust into tax administration”.<\/p>\n
\u201cAs India transitions from enforcement-driven compliance to trust-based governance, the focus must shift to proportionate, fair, and transparent enforcement mechanisms that empower taxpayers while protecting fiscal integrity,” he added.<\/p>\n
The working paper offers a detailed review of criminal provisions under the Income-tax Act, 2025, examining their relevance, proportionality, and alignment with the government\u2019s reform agenda. It proposes a principle-based framework to rationalise punishments, decriminalise minor and procedural lapses, and strengthen judicial discretion.<\/p>\n
According to the paper, while the new Income-tax Act has removed several outdated offences, it still criminalises 35 actions across 13 provisions, many of which carry mandatory imprisonment. The study recommends a calibrated roadmap for decriminalisation\u2014removing jail terms for procedural defaults, reserving criminal sanctions only for fraud or wilful evasion, and expanding the use of civil and administrative penalties instead.<\/p>\n
NITI Aayog believes such reforms will help reduce litigation, boost investor confidence, and create a fair, predictable tax regime aligned with global best practices.<\/p>\n
The release event brought together representatives from CBDT, CBIC, ICAI, DPIIT, and leading tax experts from Vidhi Legal, Lakshmikumaran & Sridharan, Deloitte, and EY, who worked closely with the NITI Aayog Consultative Group on Tax Policy (CGTP) led by P S Puniha, Distinguished Fellow, and Sanjeet Singh, Programme Director at NITI Aayog.<\/p>\n
According to the paper, embedding trust at the core of tax governance will promote voluntary compliance, optimise enforcement resources, and support India\u2019s goal of becoming a globally competitive, high-trust economy.<\/p>\n
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Mohammad Haris<\/p>\n
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More<\/span><\/p>\n<\/div>\n<\/div>\nHaris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More<\/span><\/p>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\n
October 10, 2025, 15:59 IST<\/p>\n<\/div>\n<\/div>\n
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