New Delhi, July 24 (PTI) Finance Minister Nirmala Sitharaman on Friday asked Income Tax officials to ensure convenience for honest taxpayers and firm consequences for deliberate evasion, as she urged them to focus on five priorities for responsive tax governance.

Speaking at an event to mark the 167th Income Tax Day celebrations here, the minister also noted that the department's responsibility has widened from a narrow focus on "tax collection" to a broader commitment to fairness, efficiency, ease of doing business, and service.

"Over more than a century and a half, the I-T Department has evolved alongside India's economic transformation, continuously adapting to meet the changing needs of the nation," Sitharaman said.

She said the implementation of the Income Tax Act, 2025 has simplified the law by reorganising it, reducing uncertainty and lowering compliance costs.

Alongside this, Sitharaman said, the e-filing portal has significantly strengthened this filing season with expanded computing capacity, storage, bandwidth and also network infrastructure.

Sharing data, the minister said these efforts enabled the portal to handle more than 1 crore taxpayer interactions in a single day, with daily interactions reaching around 1.6 crore at peak.

During the current filing season till July 21, more than 3.2 crore Income Tax Returns have been filed, nearly 94 per cent verified, and 60 per cent processed.

She informed that over 1.3 crore refund claims have been received, 96 per cent have been verified and 40 per cent have been processed.

"... so the department must continue reducing processing timelines... Prompt refunds strengthen confidence in the fairness of the tax administration and improve liquidity for taxpayers," she said.

While lauding the I-T Department for the work it does, Sitharaman said, "We should not rest on our achievements, however high they might be", and asked the department to focus on five priorities or 5Rs of a Responsive Tax Governance: 'Recognise, Respond, Redress, Reflect and Reform'.

"Our approach should ensure convenience for the honest taxpayer, an opportunity to correct bona fide errors, and firm consequences for deliberate evasion," she said.

The department has to be discreet, and should know to draw a line between those who are deliberately evading tax and those with bona fide errors, Sitharaman said and emphasised that the authority confirmed, conferred by the tax law, must always be exercised with humility.

A taxpayer is not merely an assessee but also a citizen and a partner in India's development, the minister stressed.

She also spoke in detail about reducing litigation and strengthening tax certainty.

"Tax certainty is one of the strongest foundations of voluntary compliance. Our longterm objective must shift from 'litigation management' to 'litigation prevention'," she said.

Further, she said the implementation of the Income Tax Act, 2025 must be accompanied by consistent guidance and continuous engagement with taxpayers, professionals and industry.

This is important because India's economy is evolving rapidly, and it will continue to generate new questions, and the Department must remain agile enough to keep pace, she said.

"Ultimately, tax certainty is an economic imperative that improves the ease of doing business and strengthens India's competitiveness as a global investment destination," the minister said.

Speaking on the occasion, Revenue Secretary Arvind Shrivastava said reducing tax litigation has always been a focus area of the government's reform agenda.

The I-T department has disposed of 2.24 lakh appeals in 2025-26, which was 30 per cent higher than the previous fiscal, he said.

The department has also pursued this through clearer legislative drafting, simplification of procedural rules, greater use of technology, and standardisation of processes to minimise ambiguity and disputes, besides taking specific steps to reduce litigation at the first appeal level, Shrivastava said.

"These measures need to be further strengthened to enable faster and more efficient resolution of tax disputes while safeguarding revenue," he said.

Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said grievance disposal has improved significantly, and the time taken for resolving taxpayer grievances has reduced substantially.

During 2025-26, the department handled 77,765 CPGRAMS grievances and disposed of 72,933 grievances out of them, achieving a 94 per cent disposal rate.

In addition, a total of 343,269 e-Nivaran grievances were handled, of which 3,26,217 grievances were disposed of, resulting in a 95 per cent disposal rate.

At the same time, the department has begun addressing the root causes of recurring grievances so that taxpayers encounter fewer difficulties in the first place, Agrawal said. PTI NKD RAM NKD MR

Responsive tax governance promotes taxpayer convenience, correction of bona fide errors, tax certainty, prompt refunds and prevention of avoidable litigation. Responsive tax governance requires convenience for honest taxpayers, correction of bona fide errors and firm consequences for deliberate tax evasion. The Income Tax Act, 2025 is intended to simplify the legal framework, reduce uncertainty and lower compliance costs, supported by stronger electronic filing infrastructure and prompt refund processing. Tax certainty should promote voluntary compliance and shift the focus from litigation management to litigation prevention through consistent guidance, simplified procedures, technology, standardised processes, effective grievance resolution and reduction of recurring taxpayer difficulties.