The Central Board of Direct Taxes (CBDT) has unveiled its comprehensive Central Action Plan for the fiscal year 2026-27, prioritizing significant capacity building among its officials and robust revenue mobilization efforts. A key focus is to equip the department for the implementation of the new Income Tax Act, 2025, which came into effect on April 1 of this year.
Enhanced Training for Tax Officials
To ensure officials are fully prepared for the updated legal framework and operational demands, the CBDT will conduct extensive training programs structured around four core themes:
- Domain Training: This will delve into the specific provisions of the new Income Tax Act, 2025, alongside sector-specific knowledge crucial for effective tax administration.
- Functional Training: Covering essential procedures, system functionalities, litigation management strategies, and overall departmental processes.
- Behavioural Training: Aimed at enhancing ethical conduct, improving communication skills, and fostering a taxpayer-centric approach within the department.
- Digital Training: Focused on leveraging modern tools such as data analytics, artificial intelligence, and other emerging technologies to improve efficiency and accuracy.
Ambitious Revenue Targets for FY27
Alongside capacity building, the CBDT has set an ambitious direct tax collection target of ₹26.97 lakh crore for FY27. This target is broken down as follows:
- Corporate Tax: Estimated at ₹12.31 lakh crore.
- Income Tax: Projected at ₹13.92 lakh crore.
- Securities Transaction Tax (STT): Aimed at ₹73,700 crore.
These targets reflect the department's commitment to maintaining steady tax collections amidst the prevailing economic environment.
Focus on Arrear Collection and Compliance
A significant part of the FY27 action plan is dedicated to improving direct tax collections, particularly through the recovery of outstanding demands. The CBDT has identified ₹2.57 lakh crore in demands that were fully confirmed by the Commissioner of Income Tax (Appeals) in FY26. Assessing officers are mandated to make all possible efforts to collect these confirmed outstanding demands, while respecting any stays granted by higher appellate authorities.
Officials have been instructed to place special emphasis on collecting both arrear and current demands. Measures against non-compliant taxpayers will be strengthened, and special teams are to be formed to identify the top 10,000 arrear entries. The plan stresses the importance of accurately classifying outstanding demands to determine collectible amounts and sustaining efforts for their recovery.
“Special efforts should be made to classify outstanding demand to arrive at the Collectible Demand entries with accuracy and sustained efforts for collection of the same,” the Central Action Plan states.
Furthermore, prompt issuance of refunds for undisputed demand entries is highlighted to avoid interest payments, which can negatively impact budget estimates. The overall strategy underscores a dual approach of internal strengthening and external enforcement to achieve the department's fiscal objectives.