Trust-based taxation drives better collections: Finance Minister

According to finance minister Nirmala Sitharaman, the government’s trust-based taxing system has enhanced collections.


The government’s trust-based taxes system, according to finance minister Nirmala Sitharaman, has enhanced collections and increased the number of return filings.

The finance minister congratulated the department for collecting the most income ever—more than 14 lakh crore—in the previous fiscal year and expressed confidence that the trend would carry over to the current fiscal year in her address on the 163rd Income Tax Day.

On the strength of robust rise in mop-up from individual and company tax, direct tax collections increased to 14.09 lakh crore in 2021–22, showing a year–over–year gain of 49.02%.


The government expects to collect 14.20 lakh crore in direct taxes during the current fiscal year.

In order to promote ease of living and ease of doing business, the finance minister said that the administration has addressed a number of legacy concerns and fixed structural problems with direct taxes.

A trust-based tax system is now guaranteed thanks to the reforms the government implemented recently.

“The taxpayers on their part have vindicated this trust-based approach as evident from the trend of improved tax collections and increase in the number of income tax returns filed,” she said.

She said that efficient use of technology had been made in the administration to increase taxpayer services, reduce decision-making discretion, and increase the openness, equity, and speed of departmental operations.

It is important to commend the Income Tax Department for successfully implementing the reforms that have been made over the past few years and for successfully reorienting itself as a taxpayer-centric organisation, the speaker added.

In order to prepare for the upcoming 25 years of growth, the finance minister asked the Income Tax Department.

“As we collectively prepare ourselves to propel our nation into the next stage of growth and development in the Amrit Kaal, we hope that the Income Tax Department will re-dedicate itself towards taking forward the progressive policies of the government and use technology to enhance the quality of taxpayer services further,” she said.

Pankaj Chaudhary, the minister of state for finance, stated during the event that the tax department’s duties also include honouring honest taxpayers and improving taxpayer convenience in addition to delivering efficient and effective tax administration.

Tarun Bajaj, the secretary of revenue, praised the department in his letter for demonstrating its competence as an organisation by adopting positive changes and pledging to provide taxpayers with timely services.

He noted that the department’s various outreach initiatives to taxpayers would go a long way toward building a relationship based on mutual respect and trust.

Nitin Gupta, head of the Central Board of Direct Taxes (CBDT), advised employees to continue putting in effort and not take it easy.