| आयकर विभाग | |
Income Tax Department | |
| Agency overview | |
|---|---|
| Formed | 1860 |
| Jurisdiction | Government of the Republic of India |
| Headquarters |
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| Motto | कोष मूलो दण्डः |
| Employees | 46,000 |
Minister responsible | |
Agency executive |
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Parent department | Central Board of Direct Taxes, Ministry of Finance |
| Website | |
| Part of a series on |
| Taxation |
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| An aspect of fiscal policy |
The Income Tax Department is a government of India agency responsible for collecting direct taxes. It functions under the Department of Revenue, Ministry of Finance, and is headed by the Central Board of Direct Taxes (CBDT). Its main responsibility is to administer direct tax laws, chiefly the Income-tax Act, 2025, which replaced the Income-tax Act, 1961, on 1 April 2026. It also enforces other economic laws such as the Benami Transactions (Prohibition) Act, 1988, and the Black Money Act, 2015.
The department levies tax on the income of individuals, firms, companies, local authorities, and other juridical persons, and handles international taxation, including double taxation avoidance agreements and transfer pricing. It also enforces measures against tax evasion, including the general anti-avoidance rule. The department has been criticised for a low conviction rate, high-pitched assessments and a large backlog of disputes, and has been accused of being used against critics of the ruling government.
Ancient Indian texts discuss the king's right to levy taxes: the Manusmriti and the Baudhayana sutras describe taxation as a royal duty, with the latter citing a share of one-sixth of income in return of protection. Kautilya's Arthashastra, a treatise on economics, treated the treasury as the basis of state power. In Raghuvamsh, poet Kalidas eulogises King Dalip, stating, "it was only for the good of his subjects that he collected taxes from them just as the sun draws moisture from the earth to give it back a thousand times."
The 19th century saw the establishment of British rule in India. Following the mutiny of 1857, the British government faced an acute financial crisis. To fill up the treasury, the first Income-tax Act was introduced in February 1860 by James Wilson, who became British-India's first finance minister. The act received the assent of the governor general on 24 July 1860, and came into effect immediately. It was divided into 21 parts consisting of no less than 259 sections. Income was classified under four schedules: i) income from landed property; ii) income from professions and trade; iii) income from securities, annuities and dividends; and iv) income from salaries and pensions. Agricultural income was subject to tax.
Subsequently, many laws were brought to streamline income tax laws. For example, the Super-Rich Tax was introduced in 1918, and the new Income-tax Act was passed in 1918. But most important among all these were the Income-tax Act of 1922. This act of 1922 marked an important change from the act of 1918 by shifting the administration of the income tax from the hands of the provincial government to the central government. Another remarkable feature of this act was that the rates were to be enunciated by the annual finance acts instead of in the basic enactment. Again, the new Income-tax Act came in 1939.
The 1922 act was amended not less than twenty nine times between 1939 and 1956. A tax on capital gains was imposed for the first time in 1946, although the concept of ‘capital gains’ has been amended many times by later amendments. In 1956, Mr. Nicholas Kaldor was given the responsibility of investigating the Indian tax system in light of the revenue requirement of the second five-year plan (1956–1961). He submitted an exhaustive report for a coordinated tax system and therefore, the result was the enactment of several taxation acts, viz., the wealth-tax Act 1957, the Expenditure-tax Act, 1957 and the Gift-tax Act, 1958.
The Direct Taxes Administration Enquiry Committee, under the chairmanship of Shri Mahavir Tyagi, submitted its report on 30 November 1959, and the recommendations made therein took shape of the Income Tax Act, 1961. The 1961 act came in to force with effect from 1 April 1962 by replacing the Indian Income Tax Act, 1922, which had remained in operation for 40 years. The present law of income tax is governed by the Income Tax Act, 1961, which has 298 sections and four schedules and is applicable to whole of India, including the state of Jammu and Kashmir.
Administration in the Income Tax Department (ITD) is run through a statutory body, the Central Board of Direct Taxes (CBDT), at the apex level and 18 territory-based regional headquarters at the field offices level. Besides these are 10 specialised directorates within the Income Tax Department, most extensive and famous among these being the Directorate of Investigation.
The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue, Ministry of Finance. The CBDT provides inputs for the policy and planning of direct taxes in India and is also responsible for the administration of direct tax laws through the IT Department. The CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex officio capacity also function as a division of the ministry dealing with matters relating to the levy and collection of direct taxes. The CBDT is headed by a chairman and also comprises six members, all of whom are ex officio special secretaries to the government of India.
The chairman and members of the CBDT are selected from the Indian Revenue Service (IRS), whose members constitute the top management of the IT Department. The chairman and every member of CBDT are responsible for exercising supervisory control over specialised functional categories at field offices of the IT Department. Various functions and responsibilities of the CBDT are distributed amongst the chairman and six members, with only fundamental issues reserved for collective decision by the CBDT. The areas for collective decision by the CBDT include policy regarding discharge of statutory functions of the CBDT and of the Central government under the various direct tax laws.
At present Income Tax Department (ITD) field offices are divided into 18 regions with territorial jurisdiction and one region for international taxation. As required for efficient and effective administration, these regions have some administrative autonomy to carry out duties assigned by CBDT.
| Serial No. | Region (headed by PrCCIT) | Sub-regions (headed by CCsIT) | Headquarter city |
|---|---|---|---|
| 1 | Gujarat | CCsIT, Ahmedabad-1, 2, TDS, Surat, Vadodara, Rajkot, DGIT (Inv.), Ahmedabad | Ahmedabad |
| 2 | Karnataka & Goa | CCsIT, Bengaluru-1 & 2, TDS, Panaji, DGIT (Inv.), Bengaluru | Bengaluru |
| 3 | Madhya Pradesh & Chhattisgarh | CCsIT, Raipur, Indore, DGIT (Inv.), Bhopal | Bhopal |
| 4 | Odisha | None | Bhubaneswar |
| 5 | North West Region | CCsIT Amritsar, Ludhiana, Shimla, Panchkula, DGIT (Inv.), Chandigarh | Chandigarh |
| 6 | Tamil Nadu & Puducherry | CCsIT, Chennai-1 to 4, TDS, Coimbatore, Madurai, Trichy, DGIT (Inv.), Chennai | Chennai |
| 7 | Delhi | CCsIT Delhi-1 to 9, TDS, Central, Exemptions, DsGIT (Inv.), Delhi, (Risk Assessment), (I&CI) | Delhi |
| 8 | North East Region | CCIT, Shillong | Guwahati |
| 9 | Andhra Pradesh & Telangana | CCsIT, Hyderabad, Vijayawada, Vishakhapatnam, DGIT (Inv.), Hyderabad | Hyderabad |
| 10 | Rajasthan | CCsIT, Jodhpur, Udaipur DGIT (Inv.), Jaipur | Jaipur |
| 11 | UP (West) & Uttarakhand | CCsIT, Ghaziabad, Dehradun | Kanpur |
| 12 | Kerala | CCsIT, Thiruvananthapuram, DGIT (Inv.), Kochi | Kochi |
| 13 | West Bengal & Sikkim | CCsIT, Kolkata-1 to 6, TDS, DGIT (Inv.), Kolkata | Kolkata |
| 14 | UP (East) | CCsIT, Allahabad, Bareilly, DGIT (Inv.), Lucknow | Lucknow |
| 15 | Mumbai | CCsIT, Mumbai-1 to 11, TDS, Central-1, 2, DGIT (Inv.), Mumbai, | Mumbai |
| 16 | Nagpur | None | Nagpur |
| 17 | Bihar & Jharkhand | CCIT, Ranchi, DGIT (Inv.), Patna | Patna |
| 18 | Pune | CCsIT, Pune, Thane, Nasik, DGIT (Inv.), Pune | Pune |
| 19 | International Taxation | CCsIT (International Taxation), Bengaluru, Mumbai | Delhi |
Directorates are meant to take responsibility of specialised functions. There are 10 specialised directorates within the Income Tax Department, most extensive and famous among these being Directorate of Investigation.
| Serial No. | Directorate | Head of directorate | Headquarter city |
|---|---|---|---|
| 1 | Investigation | 18 Director Generals of Income Tax (DGsIT) | At respective regional headquarters |
| 2 | Systems | Principal Director General of Income Tax | New Delhi |
| 3 | Legal & Research | Principal Director General of Income Tax | New Delhi |
| 4 | Training | Principal Director General of Income Tax | NADT, Nagpur |
| 5 | Intelligence & Criminal Investigation (I&CI) | Director General of Income Tax | New Delhi |
| 6 | Vigilance | Principal Director General of Income Tax/CVO | New Delhi |
| 7 | Administration & Tax Payer Services (TPS) | Principal Director General of Income Tax | New Delhi |
| 8 | Logistics | Principal Director General of Income Tax | New Delhi |
| 9 | Human Resource Development (HRD) | Principal Director General of Income Tax | New Delhi |
| 10 | Risk Assessment | Director General of Income Tax | New Delhi |
The Income Tax Department of the Government of India is responsible for direct tax administration and interacts with a large portion of the population annually. ITD outlined steps to measure and raise citizen satisfaction in their 2011 strategic action plan.[citation needed] The Sevottam model of governance is being implemented by the Income Tax Department.
The Income Tax Department is a leader in implementing Sevottam, which is certification of quality of public service delivery in India. The term Sevottam comes from the Hindi words Seva and Uttam and supposedly means excellence in service delivery. It involves the identification of the services delivered to the citizens, quality of service, its objective, improvement of quality, by using innovative methods for developing business process and more informative with the help of information technology. The citizen-centric approach includes the following three components:
Ayakar Seva Kendra (ASK; translated as Income Tax Help Centre) is an integrated model that provides single window system for registration of all applications including those or redressal of grievances as well as receipt of paper return. The assesses can approach ASK and pose all kinds of queries. ASK is available at almost all Income Tax Department offices across the country.
Launched in 2006 by the Income Tax Department, the Tax Return Preparer Scheme assists small and marginal taxpayers in preparing and filing their tax returns by creating a company of ‘Tax Return Preparers’. Tax Return Preparers are experts in income tax law and in filing of income tax returns. They can charge a maximum fee of Rs. 250, or sometimes nothing.
Over the years income tax return filing has been made more simple, convenient, and smart through use of technology. This includes following:
This section needs expansion with: more explanation on enforcement actions. You can help by adding missing information. (August 2019) |
Taxation law is not only very complex as it requires specialised knowledge and expertise to implement, but also it necessitates various kinds of deterrent actions to ensure compliance by taxpayers.
Assessment is done to ensure correct estimation of total taxable income of an assessee (i.e. taxpayer) and it determines amount of tax to be payable by (or to be refunded to) assessee. Most income tax returns filed are processed by the Centralised Processing Center in Bengaluru on the basis of the information provided by the taxpayer. Such automatic processing of returns is called as "summary assessment" and is carried out in accordance with sub-section (1) of section 143 of the Income Tax Act, 1961.
After the notices mentioned in points (1) and (2) above are complied with, assessment is made under sub-section (3) of section 143.
When no compliance is received after the lapse of the time period provided by the assessing officer, assessment is made under section 144.
Such assessments are called "scrutiny assessments."
The department can survey any business premises during the time such place is open for business for physical verification of records and other valuables. Section 133A of the Income Tax Act 1961 provides the department to conduct surveys.
The department can search residential and business premises of any taxpayer to check records and valuables to ensure that no evasion of tax is taking place. Section 132 of the Income Tax Act, 1961 provides the department the power to conduct search and seizure.
Both the survey action and the search and seizure action are known in the general parlance as "raids."
This section needs expansion with: details of most extensive operations by ITD. You can help by adding missing information. (August 2019) |
The finance ministry instructed all revenue intelligence agencies to join the crackdown on forex traders, hawala operators and jewellers besides tracking movement of demonetised currency notes.
Income Tax departments raided various illegal tax-evasive businesses in Delhi, Mumbai, Chandigarh, Ludhiana and other cities that traded with demonetised currency. The Enforcement Directorate issued several FEMA notices to forex and gold traders. Large sum of cash in defunct notes were seized in different parts of the country. In Chhattisgarh liquid cash worth of ₹4.4 million (US$46,000) was seized. In December 2016, the Income Tax department received more than 4000 emails, on black money holders, in India, within 3 days, when Income Tax Department, issued in public notice an email to report black money.
Huge amounts of cash in the form of new notes were seized all over the country after the demonetisation.
In December 2016, over ₹4 crore in new ₹2000 notes were seized from four persons in Bangalore, ₹33 lakh in ₹2000 notes were recovered from Manish Sharma, an expelled BJP leader in West Bengal, and ₹1.5 crore was seized in Goa. 900 notes of the new ₹2000 denomination were seized from a BJP leader in Tamil Nadu. Around ₹10 crore in new ₹2000 notes were seized in Chennai.
As of 10 December 2016, new notes worth ₹2.42 billion were seized by the Income Tax Department.
The Income Tax department conducted raids and surveys in various states in separate cases related to alleged tax evasion, violation of FCRA violation and illicit funding of registered unrecognised political parties.
Government data show that the IT Department has a low conviction rate. Between 2021–22 and 2025–26, the department filed 2,127 cases. Of the 1,087 cases concluded, only 233 (21.43%) resulted in a conviction. Critics have described the department's practices as "tax-terrorism", a term coined by Arun Jaitley in 2014 to describe tax administration under the previous United Progressive Alliance-II government. An investment advisor in 2018 noted that the practice continued under Jaitley as finance minister, citing inflated demands and the requirement to pay 20% of the disputed amount before filing an appeal. Other commentators have argued that unrealistic revenue targets and discretion produce high-pitched assessments, citing the Comptroller and Auditor General's finding that the department lost 65% of cases.
At the end of 2024–25, 5.39 lakh appeals involving ₹16.75 lakh crore (equivalent to ₹17 trillion or US$180 billion in 2026) were pending before the first appellate authority. The government has initiated faceless assessments and appeals, and has announced vivad se vishwas (from disputes to trust) schemes to settle cases. The department has allegedly been used to target people and organisations critical of the government, including media outlets. In one instance, after reports of 11 raids on opposition politicians, the department refused to provide information regarding the one-sided raids, prompting N. Chandrababu Naidu to label the department as "the BJP branch office."
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