Key Takeaways
- NITI Aayog proposes decriminalising 12 tax offences under Income-tax Act
- 17 offences to retain criminal liability only for fraudulent intent
- Report calls for shifting burden of proof from taxpayers to authorities
- Separate report predicts 4 million new AI jobs in five years
NITI Aayog has recommended significant tax reforms by proposing to decriminalise 12 tax-related offences in a major push to transform India’s tax system. The government think-tank suggests treating administrative and procedural defaults as civil matters rather than criminal offences.
Major Tax Reform Proposals
In its report “Towards India’s Tax Transformation: Decriminalisation and Trust-Based Governance,” NITI Aayog identified 35 criminal offences under current tax laws. The panel recommends fully decriminalising 12 of these offences, addressing them through civil or monetary penalties instead.
“Of the 35 criminal offences identified, 12 should be fully decriminalised and addressed through civil or monetary penalties alone, including a range of administrative and technical defaults,” the report stated.
For 17 other offences, the report proposes retaining criminal liability only for cases involving fraudulent or malafide intent, while removing criminal sanctions for good faith procedural lapses.
Addressing Systemic Issues
The current framework shows over-reliance on criminal sanctions, with many offences carrying rigorous imprisonment of up to seven years. Existing law presumes a “culpable mental state,” forcing taxpayers to prove their innocence.
NITI Aayog argues this approach disproportionately penalises minor technical non-compliance without distinguishing between honest errors and deliberate fraud. The report advocates shifting the burden of proof to tax authorities, requiring them to establish wilful intent beyond reasonable doubt.
Judicial Reforms Proposed
Further recommendations include removing mandatory minimum jail terms and introducing judicial discretion to decide between simple or rigorous imprisonment. This would allow courts to consider individual circumstances rather than applying blanket punishments.
AI Job Creation Potential
In a separate report on “Roadmap for Job Creation in AI Economy,” NITI Aayog highlighted both challenges and opportunities in the technology sector. While AI disruption threatens job displacements by 2031, India has the potential to create 4 million new jobs in the next five years.
The think-tank recommended launching a national AI talent mission – a coordinated effort to transform India into the AI workforce capital of the world.
