Overview

• NITI Aayog on Friday released a working paper, ‘Towards India’s Tax Transformation: Decriminalisation and Trust-Based Governance,’ proposing a recalibration of criminal provisions in the Income-tax Act, 2025.
• The paper finds 35 actions remain criminalised across 13 provisions, with mandatory minimum imprisonment prescribed for 25 offences that currently limit judicial discretion.
• It recommends fully decriminalising 12 offences and addressing them through civil or monetary penalties for administrative and technical defaults.
• Seventeen offences would attract criminal liability only where fraudulent or malafide intent is established, while six high-value, deliberate offences would stay criminal with proportionate punishment.
• The proposals call for removing most mandatory minimum sentences, restoring the prosecution’s duty to prove wilful intent, clarifying offence definitions, instituting periodic reviews, and aligning reforms with Transparent Taxation, the Jan Vishwas Act (2023), and the Viksit Bharat@2047 vision; the paper is advisory and does not change the law.