Everything You Want to Know About the Indian Income Tax Department

The Indian Income Tax Department is the government agency which is responsible for the tax collection of all eligible departments across the Republic. It is under the direct supervision of the Department of Revenue that is part of the Ministry of Finance. The Central Board of Direct Taxes (CBDT) is the apex body that heads the Income Tax Department. The primary responsibility of the IT Department is to ensure different direct tax laws are properly enforced with the taxable income adequately collected and the necessary tax refunds meted out properly.

The most primary of these tax laws is the Income Tax Act, 1961 that directly collects revenue for the Indian Government. They also enforce other laws, including the Black Money Act, 2015, as well as the Benami Transactions (Prohibition) Act, 1988.

The Income Tax Act of 1961 has a scope that empowers the Income Tax Department to levy the necessary tax on the income of a multitude of income tax slabs. These include firms, individuals, local authorities, companies, societies as well as artificial juridical individuals. They have a direct hand in influencing professionals, businesses, income-earning citizens, NGOs as well as the local authorities, among others. The Act helps the IT Department also tax professionals and businesses internationally and deals in every matter of the Double Taxation Avoidance Agreements as well as other facets of taxation internationally, including transfer pricing among others.

By combating tax avoidance and tax evasion practices, the ITD ensures a guided economy from a political perspective.

The Administrative Bodies –

The Income Tax Department has an administrative wing that is run by the statutory body known as the CBDT or the Central Board of Direct Taxes. They have 18 regional headquarters in different territories at the field offices level. There are also specialized directorates that are 10 in number, and they are within the IT Department, and the most popular one among this is the Directorate of Investigation.

As far as the CBDT is concerned, it falls directly under the Department of Revenue within the Ministry of Finance. It is the board that provides the necessary input that helps in planning direct taxes in the country and also facilitate policies as well. They are responsible for smooth administration of the direct tax laws made under the Income Tax Department as well.

The Board officials also function in their ex officio capacity as a Ministry division dealing with the levy and collection of taxes as well. A Chairman heads it, and there are a total of six members who are Special Secretaries to the Indian Government.

Who selects them, and where are the HQs?

The members of the CBDT and the Chairman are all selected from the Indian Revenue Service. They have members who generally constitute the highest management of the IT department. Every member of the CBDT and the Chairman are wholly responsible for having supervisory control over functional categories that are specialized at the field offices of the Income Tax Department.

The responsibilities and the functions of the CBDT are properly distributed among the six members and the Chairman, and the fundamental issues are reserved for the collective decision of the CBDT. The collective decision by the CBDT include policies that are related to the various discharge of many statutory functions of the CBDT as well as the Union Government.

The Headquarters of the IT Department is divided precisely into 18 regions where each one has its territorial jurisdiction, with one zone for international taxation. For effective and efficient administration, these regions have their autonomy for administration to carry out the different duties that are assigned by the CBDT.

Thus, this a quick brief of the Income Tax Department of India. They oversee a wide gamut of operations pertaining to collection of taxes and governance, related to finance. There are plenty of different functions they deal with, and these are primarily split among the various members of the office as they split the responsibilities and ensure the entire body functions smoothly.