Central Board of Direct Taxes (CBDT), Functions, Structure

Central Board of Direct Taxes is the apex authority responsible for formulating policies & overseeing the administration of direct taxes in India. Read all about CBDT in this article for UPSC exam.

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The Election Commission has directed the CBDT to verify any mismatch in the information provided in the affidavit filed by Union Minister and BJP candidate Rajeev Chandrasekhar as he contests from Thiruvananthapuram.

CBDT Released key Direct Tax Statistics through Time-Series Data

The Central Board of Direct Taxes (CBDT) consistently shares vital statistics concerning Direct Tax collections and administration with the public. As part of its ongoing commitment to transparency, the CBDT has recently unveiled updated Consolidated Time-Series data, covering up to the Fiscal Year 2022-23. Here are some important highlights from these statistics:

Net Direct Tax Collections have surged by 160.52%, soaring from Rs. 6,38,596 crore in F.Y. 2013-14 to Rs. 16,63,686 crore in F.Y. 2022-23.
Gross Direct Tax Collections have reached Rs. 19,72,248 crore in F.Y. 2022-23, marking a remarkable 173.31% increase compared to Rs. 7,21,604 crore in F.Y. 2013-14.
The Direct Tax to GDP ratio has experienced an upward trajectory, climbing from 5.62% in F.Y. 2013-14 to 6.11% in F.Y. 2022-23.
The Cost of the collection has seen a decline, accounting for 0.57% of the total collection in F.Y. 2013-14 and reducing to 0.51% of the total collection in F.Y. 2022-23.
In terms of Income Tax Returns (ITRs) filed, the total number for F.Y. 2022-23 stands at 7.78 crore, reflecting an impressive surge of 104.91% from the 3.80 crore ITRs filed in F.Y. 2013-14.

Central Board of Direct Taxes (CBDT)

The Central Board of Direct Taxes (CBDT) is a statutory authority in India responsible for administering direct taxes and enforcing tax laws under the Department of Revenue, Ministry of Finance. It formulates policies, guides and supervises the implementation of direct tax laws, and ensures the fair and equitable collection of direct taxes, including income tax and corporate tax, throughout the country. The CBDT also functions as the apex body for the Income Tax Department and plays a crucial role in the assessment, scrutiny, and collection of direct taxes in India.

CBDT Full Form

The full form of CBDT is the Central Board of Direct Taxes which is a statutory body established under the Central Board of Revenue Act, 1963, in India.

Structure of CBDT

The structure of the Central Board of Direct Taxes (CBDT) in India can be described as follows:

Components	Details
Chairman	The Chairman of CBDT is the highest-ranking official and serves as the principal advisor to the Government of India on matters related to direct taxes.
Members	The CBDT consists of several Members, each responsible for specific areas and divisions within the organization. These include: Member (Revenue): Responsible for policy formulation and revenue collection strategies. Member (Legislation and Computerization): Deals with drafting and amending tax laws and implementing computerization initiatives. Member (Investigation): Oversees tax investigation and enforcement activities. Member (Income Tax and International Taxation): Deals with matters related to income tax assessments and international taxation agreements. Member (Audit and Judicial): Responsible for tax audit procedures and handling tax-related judicial matters. Member (Administration): Oversees administrative functions, human resources, and general management of the CBDT.
Directorates	The CBDT is supported by various Directorates that assist in specific areas, including: Directorate of Income Tax (Intelligence and Criminal Investigation): Focuses on tax evasion, financial fraud, and other related offences. Directorate of International Taxation: Handles matters related to cross-border transactions, transfer pricing, and double taxation agreements. Directorate of Legal and Research: Provides legal opinions, research support, and analysis of tax-related issues.
Regional Income Tax Departments	The CBDT operates through Regional Income Tax Departments located across different regions of India. These departments are responsible for tax assessment, collection, and enforcement activities at the regional level.

The hierarchical structure of the CBDT ensures a clear division of responsibilities and effective administration of direct taxes in India, covering policy formulation, taxpayer services, legal matters, audit, investigation, and revenue collection.

Central Board of Direct Taxes Functions

The CBDT in India performs various functions to ensure the effective administration of direct taxes. These functions include:

Function	Details
Policy Formulation	CBDT formulates policies and guidelines related to the administration and enforcement of direct taxes in India.
Tax Legislation	CBDT plays a crucial role in drafting and amending tax laws, including the Income Tax Act and other relevant legislation.
Taxpayer Services	CBDT is responsible for providing taxpayer services and initiatives to enhance compliance, facilitate the filing of tax returns, and address taxpayer grievances.
Assessments and Audits	CBDT oversees the assessment of income and the conduct of tax audits to ensure accurate reporting of income and compliance with tax laws.
Tax Collection and Recovery	CBDT monitors tax collection and recovery activities to ensure the timely and efficient collection of direct taxes.
Tax Investigation and Enforcement	CBDT is involved in tax investigation and enforcement activities to identify tax evasion, financial fraud, and non-compliance with tax laws.
International Taxation	CBDT deals with matters related to international taxation, including cross-border transactions, transfer pricing, and double taxation agreements.
Legal and Judicial Matters	CBDT handles tax-related legal matters, provides legal opinions, and represents the Income Tax Department in tax-related judicial proceedings.
Computerization and Technology	CBDT focuses on leveraging technology for effective tax administration, including the implementation of digital platforms and systems.
Policy Analysis and Research	CBDT conducts policy analysis, research, and studies to assess the impact of tax policies and propose improvements in the tax system.

Powers of CBDT

The Central Board of Direct Taxes (CBDT) in India possesses various powers to administer and enforce direct taxes. These powers include:

Administrative Powers: CBDT exercises administrative control over the Income Tax Department and oversees its functioning at the national level.
Rule-Making Powers: CBDT has the authority to make rules and issue guidelines for the implementation and enforcement of direct tax laws in India.
Power to Grant Exemptions and Approvals: CBDT has the power to grant exemptions, relaxations, and approvals under certain provisions of the Income Tax Act, such as exemptions for charitable organizations or specific transactions.
Power to Conduct Tax Audits: CBDT has the power to conduct tax audits, either through its officers or by appointing external auditors, to examine and verify the accuracy and compliance of tax-related information.
Authority to Impose Penalties: CBDT can impose penalties for non-compliance, including the failure to file tax returns, underreporting of income, or any violation of tax laws.
Power to Conduct Surveys and Search Operations: CBDT can authorize surveys and search operations to gather information, detect tax evasion, and seize assets by the provisions of the Income Tax Act.
Power to Requisition Information: CBDT has the authority to requisition information, documents, or statements from individuals, banks, or other entities for tax assessment and investigation.
Power to Make Appellate Decisions: CBDT exercises appellate powers to hear and decide on appeals filed against orders passed by income tax authorities, providing a higher level of scrutiny and resolution for tax-related disputes.
Power to Enter into International Agreements: CBDT has the power to enter into international agreements, such as Double Taxation Avoidance Agreements (DTAA), to prevent double taxation and facilitate the exchange of information with other countries.

Central Board of Direct Taxes UPSC

Understanding the CBDT is crucial for UPSC aspirants as it falls within the scope of the UPSC Syllabus, specifically in the areas of the Indian Economy, Governance, and Taxation. The CBDT plays a significant role in the administration and enforcement of direct taxes in India, making it essential for aspirants to grasp its functions, powers, and structure. UPSC Online Coaching and UPSC Mock Test provide valuable resources for aspirants to enhance their understanding of the CBDT and its significance in the context of the UPSC examination, ensuring comprehensive preparation in areas related to taxation and governance.

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Central Board of Direct Taxes FAQs

Who is the current chairman of Central Board of direct tax?

The current Chairman of the CBDT is Nitin Gupta.

Who constitutes Central Board of Direct Taxes?

The CBDT consists of several Members who are responsible for specific areas and divisions within the organization.

What is the difference between CBDT and Income Tax Department?

The CBDT is the apex body that formulates policies and administers direct taxes, while the Income Tax Department is the operational arm that carries out tax assessments, collections, and enforcement activities under the guidance of the CBDT.

What is CBDT and CBIC?

CBDT refers to the Central Board of Direct Taxes responsible for direct tax administration, while CBIC (Central Board of Indirect Taxes and Customs) is the body responsible for indirect taxes and customs administration in India.