Business EconomyPosted at: Sep 16 2026 5:01PM


Tax policy must go beyond sectoral interests, focus on growth, investment: Nirmala Sitharaman

New Delhi, Sep 16 (UNI) union Finance Minister Nirmala Sitharaman on Wednesday called for a broader approach to tax policy, saying discussions around taxation should take into account the overall needs of the Indian economy rather than being driven by individual sectoral interests.
Addressing the Eighth International Tax Conference on ‘New Age Taxation’, organised by the International Tax Research and Analysis Foundation, Sitharaman said India's tax framework needs to remain fair, predictable and conducive to investment and innovation.
"Tax professionals and policymakers should assess the wider economic impact of their recommendations instead of focusing only on the concerns of specific sectors. Changes to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), including higher thresholds and fewer criminal consequences for certain defaults, were aimed at encouraging taxpayers to comply voluntarily," she said.
The Finance Minister said the approach was to make it easier for taxpayers to follow the rules while allowing enforcement agencies to concentrate their resources on serious cases.
"The government has also taken steps to reduce tax-related litigation. 'Vivad se Vishwas' dispute-resolution scheme and the increase in monetary thresholds for departmental appeals announced in 2024 were among some measures," she said.
Sitharaman also pointed to the wider use of technology in tax administration.
"Faceless assessments and appeals, pre-filled returns and the facility to file updated returns have been introduced to make the system more efficient. A large majority of income-tax refunds are now processed within a few days, reducing the waiting period for taxpayers," she added.
On direct taxation, Sitharaman highlighted the reduction in the corporate tax rate to 22% in 2019 and the restructuring of personal income-tax provisions in 2025.
She also referred to the new Income Tax Act, which replaces the Income Tax Act, 1961. According to the Finance Minister, the new legislation seeks to make the tax code more concise and easier to understand.
Sitharaman said India's Goods and Services Tax (GST) regime has also undergone further changes since its implementation in 2017, including rate rationalisation carried out in 2025.
"The next meeting of the GST Council, expected in the first week of October, will focus on process-related reforms," she said.
The Finance Minister said emerging areas of the digital economy require careful consideration from a taxation perspective. These include digital businesses, virtual digital assets, cloud-based services and cross-border transactions.
"Policymakers need to assess not only the immediate tax implications but also how proposed measures could influence investment decisions and India's attractiveness as an investment destination," she said.
On international taxation, Sitharaman said India had renegotiated tax treaties with Mauritius, Singapore and Cyprus to restore its ability to tax capital gains in the source country.
She also made a case for greater adoption of digital payments, noting that some businesses in traditional high-street markets continue to prefer cash despite the expansion of India's digital payment infrastructure.
She pointed to transaction data from the National Payments Corporation of India (NPCI) as evidence of the scale of India's digital payments ecosystem and urged consumers, businesses and professionals to support wider adoption.UNI VK AAB
Tags: #Tax policy must go beyond sectoral interests# focus on growth# investment: Nirmala Sitharaman
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