Bihar-Jharkhand I-T Department Prioritizes Outreach for New 2025 Tax Act
The regional income tax headquarters for Bihar and Jharkhand has launched a comprehensive outreach initiative aimed at familiarizing stakeholders with the provisions of the newly implemented Income Tax Act, 2025. This strategic move is designed to enhance understanding and compliance while simultaneously working to improve tax collection figures in the current financial year, following a marginal dip observed in 2025-26.
Leadership and Capacity-Building Focus
Principal chief commissioner of income tax for Bihar and Jharkhand, D Sudhakara Rao, who assumed charge on April 13 and also holds additional responsibility for Odisha, is spearheading this effort with a strong emphasis on awareness and capacity-building measures. According to officials, dedicated teams are being constituted to first train field officers on the simplified provisions of the new Act. Subsequently, these teams will engage in extensive outreach activities targeting taxpayers to ensure smoother and more efficient compliance processes.
Tax Collection Figures and Recent Decline
Official data reveals that gross tax collection for the region in 2025-26 stood at Rs 25,209 crore, which includes tax deducted at source. The net collection after refunds was recorded at Rs 17,580 crore. In comparison, the previous fiscal year 2024-25 saw higher figures with gross collection at Rs 26,470 crore and net collection at Rs 18,780 crore, indicating a noticeable decline.
Officials have attributed this dip primarily to changes in tax thresholds and slab revisions introduced in the new legislation. These modifications include an increase in the exemption limit and an expansion of income slabs, which naturally affected overall collection numbers. Despite this temporary setback, the department remains optimistic and expects collections to improve significantly during the current fiscal year as the new provisions are better understood and implemented.
Taxpayer Demographics and Economic Context
The region boasts approximately seven crore PAN card holders, but only about 40 lakh are active taxpayers. Among these active contributors, nearly 65% are salaried individuals, while the remaining 35% comprise professionals, traders, builders, and corporate entities.
Officials have noted that Bihar's economy has experienced substantial expansion in recent years, with several key sectors emerging as significant tax contributors. These include construction and housing, animal husbandry and feed, food processing and dairy, sand mining, leather goods, and textiles such as silk and Madhubani-based fabric products.
Major contributors to the tax base also include state-run entities such as Bihar State Transmission Company Limited, Bihar State Electronic Development Corporation Limited, and Bihar State Milk Cooperative Federation Limited, highlighting the diverse economic landscape of the region.
Modernization of Taxpayer Services
In addition to the outreach program, the department is placing considerable emphasis on enhancing taxpayer services through technological advancements. The implementation of faceless assessment and appeal systems allows individuals to submit necessary documents and responses online without the need to physically visit tax offices. This modernization effort aims to streamline processes, reduce bureaucratic hurdles, and improve overall taxpayer experience.
The combination of educational outreach, capacity building, and service modernization represents a multifaceted approach by the income tax department to not only recover from the recent collection dip but also to establish a more robust and compliant tax ecosystem in Bihar and Jharkhand under the new legislative framework.
