FM Sitharaman directs CBDT to withdraw all low-value tax cases within 3 months

Finance Minister Nirmala Sitharaman

Union finance minister Nirmala Sitharaman has directed the Central Board of Direct Taxes (CBDT) to identify and withdraw all the departmental tax appeals that fall below the revised monetary thresholds announced in the Union Budget 2024–25, setting a firm deadline of three months. The move is part of a broader effort to reduce litigation, ease taxpayer burden, and strengthen service delivery through timely resolution.

According to official estimates, 4,605 appeals were withdrawn following the threshold revision in 2024, and in 3,120 cases, no appeals were filed as they fell below the updated limits.

Under Budget 2024–25, the monetary thresholds for filing departmental appeals were revised upwards. For cases before the Income Tax Appellate Tribunal (ITAT), the threshold was increased from Rs 50 lakh to Rs 60 lakh; for High Courts, from Rs 1 crore to Rs 2 crore; and for the Supreme Court, from Rs 2 crore to Rs 5 crore.

These revised limits resulted in the withdrawal of cases from ITAT, High Courts and the Supreme Court, allowing courts to focus on higher-value disputes.

“Good policies alone are not enough – what matters is timely execution,” Sitharaman said while addressing officials at the 166th Income Tax Day on July 24. She urged the CBDT to accelerate disposal of disputed tax demands, ensure timely processing of refunds, and conduct region-wise performance reviews. She also directed the department to analyse the causes of litigation pendency and adopt sustainable strategies to resolve taxpayer grievances.

Of the 5.77 lakh pending appeals, over 2.25 lakh cases are targeted for disposal in FY 2025–26, potentially resolving more than Rs 10 lakh crore of disputed tax demand.

The Minister also praised the CBDT’s efforts in redrafting the new Income Tax Bill. “CBDT has put in 60,000 man-hours in drafting the new Income Tax Bill. Reducing a five-lakh-word legislation to nearly half, while retaining legal soundness, is no small achievement,” she said, calling the effort “spectacular.”

Emphasising the social contract between the state and taxpayers, Sitharaman said that seamless service delivery and proactive engagement are critical to maintaining trust. “Let’s reaffirm that contract. Let’s earn the trust of the taxpayers,” she added.

The directions follow a high-level conclave of principal chief commissioners of income-tax chaired by Sitharaman on June 23, where key operational priorities were discussed.