New Delhi, Oct 10 (UNI) NITI Aayog today released the second working paper under the NITI Tax Policy Working Series–II titled ‘Towards India’s Tax Transformation: Decriminalisation and Trust-Based Governance’, an official statement said.
It follows the first paper in the series ‘Enhancing Certainty, Transparency, and Uniformity in Permanent Establishment and Profit Attribution for Foreign Investors in India’ released earlier.
While releasing the working paper, BVR Subrahmanyam, CEO of NITI Aayog, noted that India’s tax reforms are entering a decisive phase marked by simplification, modernisation and the integration of trust into tax administration.
He said, “As 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.”
This working paper undertakes a comprehensive assessment of criminal provisions of the Income-tax Act, 2025, evaluating their necessity, proportionality and alignment with the Government’s broader reform agenda.
It proposes a principle-based framework to rationalise punishments, decriminalise minor and procedural non-compliances and reinforce judicial discretion.
This paper also highlights that while the 2025 Act omits several archaic offences, it continues to criminalise 35 actions and provisions across 13 provisions, most of which prescribe mandatory imprisonment.
The study recommends a calibrated decriminalisation roadmap-removing imprisonment for minor procedural defaults, restricting criminal sanctions to cases involving fraud or wilful evasion, and enhancing the role of civil and administrative penalties, the statement added.
NITI Aayog also underscored that such reforms will reduce litigation, improve investor confidence, and further India’s commitment to a fair and predictable tax regime that aligns with global best practices.
This working paper concluded that embedding trust at the core of tax governance will strengthen voluntary compliance and optimise enforcement resources.
It will also support India’s vision of becoming a globally competitive, high-trust economy.
Representatives of CBDT, CBIC, ICAI, DPIIT and leading tax experts from Vidhi Legal Lakshmikumaran & Sridharan, Deloitte, EY and others, who have worked in close coordination with the NITI Aayog Consultative Group on Tax Policy (CGTP) led by Dr. P. S. Puniha, Distinguished Fellow, NITI Aayog, and Sanjeet Singh, Programme Director, NITI Aayog were present at the launch event.
NITI Aayog releases working paper on India’s tax transformation
