Direct tax collection and management in India has witnessed
significant reforms in the recent years. However, disputes
management is still a challenge for both- assessees as well as the
tax authorities. With an estimated INR 10.6 trillion stuck in
Income tax disputes at the end of FY 2020-21, there is an urgent
need to improve the mechanisms for not only solving tax disputes,
but more importantly for avoiding them.
As can be seen in the adjoining figure, in the previous decade,
income tax disputes have risen rapidly with a slight dip in FY
2016-17 and FY 2017-18, but then increasing substantially in FY
2020-21. While the Government has consistently expressed its
intention to expedite the dispute resolution process, it is not
nearly enough.
