Income Tax Dept Targets Disposal of Over 2 Lakh CIT(A) Appeals in FY26

The Income Tax Department is planning to clear a huge backlog of tax appeals. For Financial Year 2026, they plan to settle more than 2 lakh cases at the CIT(A) level, which is much higher than last year’s 1.72 lakh cases. The government is trying to make the tax system faster and more efficient and reduce delays.

The following are the major takeaways from the 2026 budget:

Assessment and Penalty Proceedings

The government wants to make tax procedures faster and simpler. Earlier, assessment and penalty cases were handled separately, which took more time. Previously, it accounted for Rs. 100,000 to Rs. 150,000 cases out of Rs. 540,000 cases. Now, both will be decided together in one order.

Reduced Friction

The government is also reducing harsh punishments. Earlier, penalties for giving wrong information could go up to 200%. Now, this has been reduced to 100%, making the system fairer and less stressful for taxpayers.

Updated Returns

About 12.2 million people have filed updated tax returns since the system was expanded. This allows taxpayers to fix mistakes in their returns within four years by paying a fee that increases over time.

Acknowledgement for compliance

To encourage honest taxpayers, the government is offering relief if mistakes are admitted. If someone accepts that they have under-reported income and pays the tax on time, they will get a 50% reduction in penalties. This makes it easier for people to correct errors without fear.

Tech Sector Improved

The technology sector has received a boost. The safe-harbour limit has been increased to Rs. 2,000 crore. Now, more IT and IT-enabled service companies can follow a fixed and predictable tax method, reducing disputes and uncertainty.