Tax Reforms

[pib] Abolition of Income-Tax Ombudsman and Indirect Tax Ombudsman


Mains Paper 2: Governance| Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From the UPSC perspective, the following things are important:

Prelims level: Office of the IT Ombudsman and its mandate

Mains level: India’s rising middle class and its impact on tax collections


  • The Union Cabinet chaired by PM has approved the proposal for Abolition of Institution of Income-Tax Ombudsman and Indirect Tax Ombudsman.

Who is Income Tax Ombudsman?

  1. It is an Independent body comprises of former tax officials or Indian Revenue Service Officials formed by the Government, empowered to address and settle tax payer’s grievances.
  2. The Ombudsman is governed by, and has to comply with the Income Tax Ombudsman Guidelines, 2006.
  3. At present, the Government has set-up Tax Ombudsman at 12 cities namely New Delhi, Mumbai, Chennai, Ahmedabad, Kanpur, Chandigarh, Pune, Kochi, Kolkata, Hyderabad, Bangalore and Bhopal.

Why such move?

  1. The Institution of Income-Tax Ombudsman was created in the year 2003 to deal with grievances of public related to settlement of complaints relating to Income Tax.
  2. However, the Institution of Ombudsman failed to achieve its objectives.
  3. It was observed that institution of new complaints have in turn fallen to single digits.
  4. Also, tax payers started preferring alternate methods of grievance redressal like CPGRAMS (Centralized Public Grievance Redress and Monitoring System), Aaykar Seva Kendras etc.
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