Section 240 Income Tax Act 2025: What Rights Does the Taxpayer's Charter Provide?
Section 240 requires the Central Board of Direct Taxes to adopt and declare a Taxpayer's Charter and empowers the Board to issue administrative directions for its implementation. This guide explains the statutory rule, its practical significance and its limits.
What does Section 240 provide?
The provision directs the Board to adopt and declare a Taxpayer's Charter and authorises it to issue such orders, instructions, directions or guidelines to other income-tax authorities as it considers appropriate for administering that Charter.
Section 240 is a concise enabling and mandatory administrative provision. It does not itself list each service standard or prescribe a separate appeal, compensation mechanism or automatic cancellation of an assessment.
How does the Taxpayer's Charter work?
1. Duty to adopt and declare the Charter
The word shall places a statutory duty on the CBDT to adopt and declare the Charter. The Charter communicates the administration's service commitments and its expectations of taxpayers.
2. Power to administer the Charter
The Board may issue orders, instructions, directions or guidelines to income-tax authorities for implementation. Their effect in a particular case depends on their text, the Act and other applicable legal provisions.
3. Relationship to other legal remedies
The Charter complements, rather than replaces, statutory provisions on notices, assessment, appeals, revision, rectification and grievance redressal. A taxpayer should observe the applicable statutory deadlines even when a service grievance is pending.
What does the Taxpayer's Charter seek to achieve?
The Income Tax Department's published Charter describes administrative commitments such as fair and courteous treatment, correct tax collection, privacy, confidentiality, timely decisions, assistance and accountability. It also expects taxpayers to be honest, informed, cooperative and compliant with tax obligations.
Can the Charter override the Income-tax Act?
No. Administrative guidance cannot displace an express statutory requirement. Where a taxpayer disputes an assessment, demand or penalty, the prescribed legal procedure and limitation period remain important.
Relevant statutory and administrative definitions
Practical example: Delay in responding to a taxpayer
Suppose a taxpayer submits a request for correction of an apparent mistake and receives no timely response. The taxpayer may cite the Charter's commitment to responsive administration while pursuing the appropriate statutory rectification or grievance procedure. The Charter is relevant to service standards, but it does not by itself extend the statutory deadline or guarantee the outcome.
Section 240 compared with Section 119A of the 1961 Act
Section 119A of the Income-tax Act, 1961 similarly required the Board to adopt and declare a Taxpayer's Charter and permitted administrative directions for its implementation. Section 240 carries forward that framework in the Income-tax Act, 2025.
Related provisions
Section 236: Income-tax authorities; Section 238: Control of income-tax authorities; Section 239: Instructions to subordinate authorities; and Section 241: Jurisdiction of income-tax authorities.
Frequently asked questions
Is the Taxpayer's Charter compulsory?
Yes. Section 240 uses mandatory language requiring the Board to adopt and declare the Charter.
Does Section 240 itself grant compensation for delay?
No. It does not establish an independent compensation formula or automatic payment remedy.
Are Charter complaints the same as tax appeals?
No. A service complaint and a statutory appeal serve different purposes. A complaint does not automatically suspend appeal deadlines.
Which older provision corresponds to Section 240?
Section 119A of the Income-tax Act, 1961.
Official legal sources and further reading
Last reviewed: 11 November 2026. This article is general legal information and is not a substitute for advice on a particular proceeding.