New Delhi, Oct. 11 -- Government think tank NITI Aayog on Friday proposed the decriminalisation of several tax-related administrative, technical or procedural offences and recommended civil and monetary penalties for the same. NITI Aayog, in a report titled "Towards India's Tax Transformation: Decriminalisation and Trust-Based Governance", said the Income Tax Act, 2025, marks significant progress, omitting 13 offences (such as failures in administrative notifications by company liquidators or receivers), but continues to criminalise 35 actions and omissions across 13 provisions. "All these offences are punishable with imprisonment and fine, and for 25 of them, the Act prescribes mandatory minimum imprisonment terms. While these measures are intended to safeguard state revenue and deter evasion, the continuing breadth of criminalisation, compounded by a presumption of culpable mental state, signals an ongoing reliance on criminal law as a routine enforcement tool rather than a targeted last resort," it said. Under the NITI Aayog framework, of the 35 offences, the 12 marked for complete decriminalisation include technical and procedural lapses, such as delays in filing statements, clerical errors in returns, or failure to furnish documents, which would instead attract civil or monetary penalties. The 17 offences classified as partially decriminalised would retain criminal liability only where fraudulent or wilful intent is proven beyond reasonable doubt. The remaining six offences, involving serious misconduct such as fabricating evidence, concealing high-value income or orchestrated tax evasion, are to continue inviting prosecution with proportionate punishment. The think tank also placed strong emphasis on reforming the punishment framework. It proposed removing the presumption of culpable mental state, ensuring that the burden of proof lies with the prosecution rather than the taxpayer. Further, it recommended abolishing mandatory minimum imprisonment terms, allowing judges to exercise discretion based on the gravity of the offence, whether to impose a fine, simple imprisonment or no imprisonment at all. The paper also called for the preparation of detailed Guidance Notes for Prosecution of Income Tax Cases, so that criminal proceedings are initiated only after civil remedies have been exhausted. "These structural reforms are pivotal for realising the government's vision of a modern, user-friendly, and fair tax administration. The focus is to drive a transition from coercive compliance to a model that empowers taxpayers, differentiates between error and fraud, and deploys the criminal law only when vital public interests are at stake. Rationalised punishments, restoration of judicial discretion, and targeted criminalisation will lessen the burden on the criminal justice system while protecting fiscal interests and upholding constitutional rights," the report said....