The Central Board of Direct Taxes (CBDT) is an apex statutory body and the policy-formulating authority for direct taxes in India. It functions under the Department of Revenue within the Ministry of Finance. The CBDT was formally constituted on January 1, 1964, under the Central Board of Revenue Act, 1963. This creation solved the problem of administrative complexity by bifurcating the original Central Board of Revenue, which was established in 1924 and handled both direct and indirect taxes.
The CBDT administers the direct tax laws, primarily the Income-tax Act, 1961, and supervises the entire Income Tax Department. Its mechanism involves policy creation, legislative inputs, and administrative control. The Board's authority to issue binding instructions and orders to subordinate income-tax authorities is derived principally from Section 119 of the Income-tax Act, 1961. Furthermore, it possesses rule-making authority under Section 295 of the same Act. The CBDT connects directly to the Central Board of Indirect Taxes and Customs (CBIC), which is its counterpart for indirect taxes.
The Board is composed of a Chairman and six Members. A significant recent change was the launch of the Faceless Assessment Scheme in 2020, which aimed to eliminate personal contact between taxpayers and tax officials. Additionally, the CBDT recently updated its international tax reporting guidance to include specified crypto-assets and Central Bank Digital Currencies (CBDCs) under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) frameworks. The Board also notified the Income-tax (Third Amendment) Rules, 2026, which introduced Form ITR-BN for returns related to search and requisition cases.