The Central Board of Direct Taxes (CBDT) is a statutory authority and the apex body for administering direct tax laws in India, functioning under the Department of Revenue in the Ministry of Finance. Its origin traces back to the single Central Board of Revenue, which was established in 1924 to manage both direct and indirect taxes. The CBDT was formally constituted on January 1, 1964, under the Central Board of Revenue Act, 1963, to solve the problem of unwieldy tax administration by bifurcating the original Board into two separate entities.
The CBDT works by formulating policy, providing legislative inputs, and supervising the entire Income Tax Department. Its core mechanism involves administering the Income-tax Act, 1961, and its authority to issue instructions and orders binding on subordinate income-tax authorities is primarily derived from Section 119 of the Act. Furthermore, the Board exercises delegated legislation through its rule-making power under Section 295 of the Income-tax Act, 1961.
The CBDT is intrinsically connected to the Income Tax Department, which is its operational arm, and its counterpart for indirect taxes, the Central Board of Indirect Taxes and Customs (CBIC). In recent years, the CBDT has driven significant changes, notably the rollout of the Faceless Assessment Scheme, which became operational from 2019–20 to ensure jurisdiction-free, anonymised tax assessments. It has also recently updated its guidance on international taxation, such as the FATCA and CRS, to align with the Income Tax Act, 2025, and Rules 238 to 240 of the Income Tax Rules, 2026, incorporating new asset classes like CBDCs and crypto-assets.