Overview

• The working paper, titled “Towards India’s Tax Transformation: Decriminalisation and Trust‑Based Governance,” recommends fully decriminalising 12 offences, limiting 17 to cases proven as fraud, and retaining six serious crimes.
• It calls for removing mandatory minimum imprisonment, restoring judicial discretion in sentencing, and allowing non‑custodial options for minor or first‑time cases.
• The paper urges shifting the burden of proving fraudulent intent from taxpayers to tax authorities and eliminating presumptions of a culpable mental state.
• A pre‑prosecution guidance note instructs officials to exhaust civil remedies and apply a standardised test of wilful intent before initiating criminal cases.
• The recommendations are advisory and aim to guide government choices as the Income‑Tax Act, 2025 advances toward implementation expected in 2026.