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Finance Minister Nirmala Sitharaman Unveils 5R Framework for Accountable Tax System at 167th Income Tax Day

UPSC / SSC current affairs note · Economy

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Why in news

Finance Minister Nirmala Sitharaman outlined the 5R framework for a responsible tax system at the 167th Income Tax Day function in New Delhi. She called for greater tax certainty and reduction in legal disputes, signaling a policy push towards taxpayer-friendly reforms.

Background

The Income Tax Day is celebrated annually on July 24 to commemorate the introduction of income tax in India in 1860. The 5R framework is a new policy approach aimed at improving tax administration and taxpayer confidence.

Key facts

in5points

  1. Finance Minister Nirmala Sitharaman addressed the 167th Income Tax Day function in New Delhi.

  2. She unveiled the '5R' framework for a responsible and accountable tax system.

  3. The 5Rs stand for: Rationalisation, Reduction, Relaxation, Removal, and Repeal.

  4. She emphasized the need for greater tax certainty and reduction in legal disputes.

  5. The Minister called for a taxpayer-friendly approach to enhance voluntary compliance.

  6. She highlighted the role of technology in improving tax administration and transparency.

  7. The event was organized by the Central Board of Direct Taxes (CBDT).

  8. Income Tax Day marks the introduction of income tax in India in 1860 by Sir James Wilson.

Prelims pointers

  • 167th Income Tax Day celebrated on July 24, 2024.
  • Income Tax introduced in India in 1860 by Sir James Wilson.
  • Central Board of Direct Taxes (CBDT) is the apex body for direct tax administration.
  • 5R framework: Rationalisation, Reduction, Relaxation, Removal, Repeal.
  • Finance Minister Nirmala Sitharaman is the Union Minister for Finance and Corporate Affairs.

Mains angles

  • GS3: Tax reforms and their impact on economic growth and compliance.
  • GS2: Role of government policies in improving tax administration and reducing litigation.
  • GS3: Technology integration in tax systems for transparency and efficiency.
  • GS2: Significance of taxpayer-centric approaches in fiscal policy.
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