The Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025 on February 1st, 2025, at 11:00 AM in Parliament, marking her 8th consecutive budget under the Modi Government 3.0.This year’s budget outlines key initiatives aimed at boosting economic growth, increasing transparency, and addressing challenges in sectors like taxation and infrastructure development. Clause 42 of the Budget proposes an amendment to Section 144C of the Income Tax Act, which governs references to the Dispute Resolution Panel (DRP). The amendment gives the Central Government the power to implement a faceless scheme for the DRP, designed to improve efficiency, accountability, and transparency in resolving tax disputes.

This is expected to help reduce delays and ease the burden on taxpayers by ensuring quicker and more effective dispute resolutions. Get Complete Coverage on Budget 2025-26, Click Here In addition, Sub-section (14C) of the revised section allows the Central Government to modify certain provisions of the  Act to better align with the faceless dispute resolution scheme. Currently, a proviso restricts the issuance of such directions after March 31, 2025. The proposed change in this Budget aims to remove this restriction, extending the timeline for the implementation of the faceless scheme.

The revised provisions are set to take effect from April 1, 2025. This move is seen as a significant step toward modernizing the dispute resolution process, complementing the government’s broader agenda to digitize services and enhance the ease of doing business. By extending the timeline, the government ensures that sufficient time is given for all involved parties to prepare for the transition, facilitating a smoother implementation of the faceless system. As the Budget 2025 unfolds, this amendment is poised to play a crucial role in transforming India’s tax dispute resolution process into a more streamlined and transparent system.