NITI Aayog on Friday released its second paper in the Tax Policy Working Paper Series, titled “Towards India’s Tax Transformation: Decriminalization and Trust-Based Governance.” The paper calls for reducing criminal offences under tax law from 35 to just 6, marking a significant shift toward rational and intent-driven enforcement. Advertisement

The report outlines a three-tier reform strategy.

First, it recommends fully decriminalising 12 offences that are technical or procedural in nature, such as filing delays or minor reporting errors.

Second, it suggests retaining criminal liability for 17 offences only when fraudulent or mala fide intent is proven.

Third, it advises keeping prosecution for six core offences involving deliberate and high-value tax evasion, falsification of account

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