Centre Directs Tax Department to Withdraw Appeals Below New Thresholds Within 3 Months
Government Pushes for Faster Resolution of Tax Disputes
Finance Minister Nirmala Sitharaman has directed the Income Tax Department to withdraw all pending appeals within three months where the tax demand falls below the revised monetary thresholds announced in Budget 2024–25.
Revised Monetary Thresholds for Tax Appeals
According to the Finance Ministry:
- The threshold for appeals to the Income Tax Appellate Tribunal (ITAT) increased from ₹50 lakh to ₹60 lakh.
- For High Courts, the new limit is ₹2 crore (up from ₹1 crore).
- For the Supreme Court, it is now ₹5 crore (up from ₹2 crore).
These measures are expected to reduce litigation and free up judicial resources.
Progress Report on Appeals and Cases
Since the changes:
- Over 4,600 appeals have already been withdrawn.
- More than 3,100 cases were not pursued under the new limits.
- Out of 5.77 lakh pending appeals, more than 2.25 lakh are targeted for resolution in FY26—representing over ₹10 trillion in disputed tax.
Sitharaman emphasized the need to identify and close all cases that fall below the revised limits.
Emphasis on Dispute Resolution and Transparency
The Finance Minister also instructed Principal Chief Commissioners to:
- Speed up the disposal of disputed tax demands pending before faceless appellate authorities.
- Focus on regional performance disparities in taxpayer services.
- Simplify compliance processes to enhance transparency and taxpayer trust.
“This is aimed at reducing litigation backlog and ensuring timely resolution,” the ministry stated.
Taxpayer Services See Marked Progress
As of mid-June 2025:
- Over 82% of 1.6 lakh grievances filed have been resolved.
- Refunds worth ₹33,872 crore have been issued—a 58% increase over the previous year.
The government is also monitoring grievance disposal through its online platforms, aiming to identify recurring issues and strengthen redressal systems.
New Income Tax Bill and Future Outlook
The Finance Minister praised the New Income Tax Bill as a step toward simplification and legal clarity. She instructed the department to:
- Conduct nationwide awareness campaigns.
- Launch capacity-building programs after Parliament passes the bill.
These reforms reflect the government’s larger vision of building a trust-based tax regime focused on voluntary compliance, ease of doing business, and reduced litigation.
