Be Prudent. That’s the recommendation of the brand new chairman of the Central Board of Direct Taxes Ravi Agarwal to revenue tax officers and can also be a key precedence for him. The opposite precedence for him is the evaluate of the Revenue Tax Act, 1961, which was introduced by Finance Minister Nirmala Sitharaman within the Union Price range 2024-25.
Agarwal, who’s simply finishing a month because the CBDT chief, suggested officers to comply with a PRUDENT method on the current Revenue Tax Day celebrations. “On the Revenue Tax Day, I’ve steered to the officers that we must always have a PRUDENT method, and I’ve outlined prudent,” he advised BT.
Elaborating on the acronym PRUDENT, he defined that P stands for being skilled and having an expert method. “This implies there must be quite a lot of capability constructing, let’s minimize by way of crimson tape, let’s be delicate and let’s be final result oriented,” he defined.
R is for being responsive and accountable, whereas U stands for understanding legal guidelines, transactions and enterprise. “As income officers, we must always take all initiatives to truly perceive the economics of a enterprise. We see the transactions which might be concerned, the regulation underlying that. Principally, as soon as we perceive that, then we turn out to be extra skilled and more practical,” Agarwal mentioned when requested about his precedence areas.
He additional defined that D stands for information and making data-based choices. “Surmises, conjectures, estimations must be changed by information pushed determination making,” he mentioned.
The CBDT chief additionally underlined that E is enforcement with empathy. “As income officers, if some intrusive motion is taken, on the finish of it, the taxpayer can also be a human being. We must always have some empathy. That is how we must always do enforcement,” he mentioned.
The letter N stands for non-intrusive tax administration. “We’re doing it quite a bit. We now have shifted our method to being taxpayer centric and offering taxpayer providers. The taxpayer base has additionally gone up. And subsequently this want of non intrusive tax administration is essential. How do you nudge folks in the direction of compliance,” he mentioned.
Lastly, T is for know-how, which is already an integral a part of tax administration. “We must always imbibe it extra and this can even enhance our techniques and result in higher tax administration,” he mentioned.
Agrawal, who was beforehand Member CBDT, was appointed as CBDT Chairman for a one-year interval till June 30, 2025. He took cost on July 1.
In an interplay with BT, he additionally highlighted that the evaluate of the Revenue Tax Act, 1961, is one other key precedence for him. Whereas an inner committee of officers would undertake the evaluate, he defined that step one could be to undergo the present provisions and assess how it may be introduced in a way to the taxpayer that’s straightforward to learn and perceive.
“Taxpayers don’t undergo the Revenue Tax Act as a result of it’s sophisticated,” he mentioned. The evaluate would additionally minimize down redundancies and likewise simplify the language and probably take a look at presenting it in a format that’s straightforward for the taxpayer to learn. The subsequent step could be to enter the granular particulars, he mentioned.
The Finance Minister had mentioned the evaluate could be executed over the following six months.
