<p>New Delhi: The Union Budget 2026-27 does not make any changes to the income tax (I-T) slabs and rates. However, several procedural changes have been announced, including increased time to file revised returns and partial decriminalisation of income tax offences. Finance Minister Nirmala Sitharaman has also announced that the Income Tax Act, 2025, would come into force from April 1, 2026. In an interview with DH’s Gyanendra Keshri, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal talks about the proposed changes in the new tax rules. He also delves into issues impacting refunds and the rationale for increase in the Securities Transaction Tax (STT) announced in the Budget.</p>.<p><strong>Edited excerpts:</strong></p>.<p><strong>What are the key changes expected in the income tax rules with the implementation of the new Act from April?</strong></p>.<p>The new Act is essentially simplification of language, consolidation of proposals and reduction of redundancies. It will make it simpler for the taxpayer to understand, comprehend and present the issues in a more presentable form. While drafting the new regulation, essentially the idea was to make it easy for the people to understand, so as to minimise litigation and scope for multiple interpretations.</p>.<p><strong>What is the focus of changes announced in the Union Budget 2026-27 related to income tax?</strong></p>.<p>The set of proposals announced in the Budget is procedural changes. It essentially involves decriminalisation, process improvement and timeline rationalisation. For example, we have decided to integrate assessment and penalty proceedings into a single process. These are essentially aimed at strengthening the overall experience of the people’s tax compliance and reducing litigation.</p>.<p><strong>The announcement on the Securities Transaction Tax (STT) led to a sharp drop in the stock markets. What is the reason for the hike in STT rates?</strong></p>.<p>The STT is proposed to be increased only on futures and options. These are highly-speculative domains. The volume is growing exponentially. Futures and options trading volume is now 500 times the GDP of the country. On the one hand of the spectrum, you have a retail investor, and on the other, there is algo trading. In this process, the majority of retail investors are losing money. So the idea is to discourage this highly-speculative trading.</p>.<p><strong>What kind of additional revenue the STT hike is expected to generate?</strong></p>.<p>The revenue is dependent on the volume. Our expectation is that with the increase in tax rates, the volume may go down. Our objective is not revenue, but protection of investors.</p>.<p><strong>There have been a lot of complaints from tax-payers about delays in refunds. What is the status of refunds?</strong></p>.<p>It’s not that we are not issuing refunds. It is delayed if there are discrepancies. When we find that taxpayers have responded and updated the return, the refunds are being issued. If it is a low-risk case, refunds are going. In any case, we have already sent about 95% of the refunds. </p>.<p><strong>Is the use of new technology, especially AI, impacting refunds?</strong></p>.<p>We are extensively using AI. But it is not the only thing we are depending on. Once there is a red flag through AI, eyeball-checking is also done. There is proper filtering. We check the profile of the red-flagged tax-payers, then action is taken.</p>
<p>New Delhi: The Union Budget 2026-27 does not make any changes to the income tax (I-T) slabs and rates. However, several procedural changes have been announced, including increased time to file revised returns and partial decriminalisation of income tax offences. Finance Minister Nirmala Sitharaman has also announced that the Income Tax Act, 2025, would come into force from April 1, 2026. In an interview with DH’s Gyanendra Keshri, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal talks about the proposed changes in the new tax rules. He also delves into issues impacting refunds and the rationale for increase in the Securities Transaction Tax (STT) announced in the Budget.</p>.<p><strong>Edited excerpts:</strong></p>.<p><strong>What are the key changes expected in the income tax rules with the implementation of the new Act from April?</strong></p>.<p>The new Act is essentially simplification of language, consolidation of proposals and reduction of redundancies. It will make it simpler for the taxpayer to understand, comprehend and present the issues in a more presentable form. While drafting the new regulation, essentially the idea was to make it easy for the people to understand, so as to minimise litigation and scope for multiple interpretations.</p>.<p><strong>What is the focus of changes announced in the Union Budget 2026-27 related to income tax?</strong></p>.<p>The set of proposals announced in the Budget is procedural changes. It essentially involves decriminalisation, process improvement and timeline rationalisation. For example, we have decided to integrate assessment and penalty proceedings into a single process. These are essentially aimed at strengthening the overall experience of the people’s tax compliance and reducing litigation.</p>.<p><strong>The announcement on the Securities Transaction Tax (STT) led to a sharp drop in the stock markets. What is the reason for the hike in STT rates?</strong></p>.<p>The STT is proposed to be increased only on futures and options. These are highly-speculative domains. The volume is growing exponentially. Futures and options trading volume is now 500 times the GDP of the country. On the one hand of the spectrum, you have a retail investor, and on the other, there is algo trading. In this process, the majority of retail investors are losing money. So the idea is to discourage this highly-speculative trading.</p>.<p><strong>What kind of additional revenue the STT hike is expected to generate?</strong></p>.<p>The revenue is dependent on the volume. Our expectation is that with the increase in tax rates, the volume may go down. Our objective is not revenue, but protection of investors.</p>.<p><strong>There have been a lot of complaints from tax-payers about delays in refunds. What is the status of refunds?</strong></p>.<p>It’s not that we are not issuing refunds. It is delayed if there are discrepancies. When we find that taxpayers have responded and updated the return, the refunds are being issued. If it is a low-risk case, refunds are going. In any case, we have already sent about 95% of the refunds. </p>.<p><strong>Is the use of new technology, especially AI, impacting refunds?</strong></p>.<p>We are extensively using AI. But it is not the only thing we are depending on. Once there is a red flag through AI, eyeball-checking is also done. There is proper filtering. We check the profile of the red-flagged tax-payers, then action is taken.</p>