In a major push to reduce tax-related litigation and improve service delivery, Union Finance Minister Nirmala Sitharaman has instructed the Central Board of Direct Taxes (CBDT) to withdraw all departmental appeals that fall below the newly revised monetary thresholds announced in the Union Budget 2024–25. A strict deadline of three months has been set for the task.
The directive is part of a broader government strategy to streamline the tax administration system, alleviate taxpayer burden, and ensure faster resolution of disputes.
The revised thresholds, introduced in this year’s Budget, aim to prevent escalation of low-value disputes to higher courts. As per the updated limits, the minimum amount for departmental appeals has been raised to Rs. 60 lakh for the Income Tax Appellate Tribunal (ITAT), Rs. 2 crore for High Courts, and Rs. 5 crore for the Supreme Court. These new benchmarks represent a significant increase from the previous limits of Rs. 50 lakh, Rs. 1 crore, and Rs. 2 crore respectively.
Following the implementation of these changes, approximately 4,605 appeals have already been withdrawn by the department, and an additional 3,120 appeals were not filed at all as they no longer met the revised thresholds.
While speaking at the 166th Income Tax Day celebrations on July 24, Sitharaman stressed the importance of execution over policy design. “Good policies alone are not enough—what matters is timely execution,” she told tax officials. She also called for a faster resolution of disputed tax demands, region-wise reviews of departmental performance, and improved handling of taxpayer grievances.
The Finance Minister urged the CBDT to not only withdraw eligible appeals promptly but also to analyse the root causes behind litigation backlogs and adopt long-term strategies for sustainable resolution.
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