Taxation in India was seen as a back-office function, compliance-heavy, technical, and, to many, “boring” with little glamour. The role of the tax team was confined to filing returns, collating data, and providing information to consultants for litigation.
Fast forward to today, and the tax function has undergone a remarkable transformation. With the government’s forward-looking approach—seeking industry perspectives before drafting regulations and making amendments—tax has become one of the most dynamic and exciting areas of corporate practice. What was once routine is now strategic, shaping not just compliance but also business credibility, resilience, and growth.
From Compliance to Core Strategy
When I began my career with a Big Four firm and later moved into industry, tax was still defined by silos “direct” and “indirect.” Over two decades, I have seen it rise from compliance to the boardroom. Today, a tax head is no longer simply reporting to the CFO; increasingly, tax leaders are sitting next to the CFO as Tax Directors—trusted advisors in strategic decision-making.
While I firmly believe that tax follows business and not the other way around, the reality is stark: missteps in tax can derail business plans, invite regulatory penalties, and harm reputation. For this reason, the function needs to be reimagined along three integrated verticals: Litigation, Strategy, and Compliance.
Litigation – Close the Past, Secure the Future
Long-drawn disputes drain management time and shareholder value. The modern litigation approach is about closure, not just defense:
- Maintaining a defense file with full documentation to ensure continuity despite team changes or data losses.
- Expediting closure of disputes to restrict the interest meter and reduce contingent liabilities—especially critical for listed companies and during M&A.
- Leveraging amnesty schemes where appropriate to bring certainty and contain exposures.
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Strategy – Thinking Beyond Borders
Tax strategy is now inseparable from business planning. It is about foresight and proactive alignment:
- Real-time documentation and proper benchmarking of related party transactions.
- Embedding ESG considerations since tax transparency increasingly feeds into sustainability scores.
- Using Advance Rulings and APAs for certainty.
- Being selective—not every issue needs to be litigated; some may be better resolved through advocacy or representation.
- Policy advocacy and professional networking to anticipate challenges.
- Extreme caution on cross-border expansions—analyzing corporate tax PE and VAT PE exposures before entering new jurisdictions.
Balancing Risk and Opportunity
The tax environment is complex and dynamic. Businesses face increasing scrutiny from regulators, rising expectations of transparency, and evolving global norms such as BEPS (Base Erosion and Profit Shifting) and Pillar Two (Global minimum taxation). At the same time, tax incentives and credits—whether for R&D, green energy, or digital infrastructure—present opportunities to enhance competitiveness.
The nuanced role of the tax function lies in striking this balance: safeguarding compliance and reputation while leveraging legitimate avenues for optimization. Non-compliance today does not just carry financial costs—it directly translates into reputational risks, with potential consequences for investor confidence, customer trust, and even employer branding.
Compliance – A Shared Responsibility
Compliance remains the foundation, but it is no longer just the tax team’s burden. Every function—HR, procurement, logistics, finance—plays a role. A minor lapse in process can trigger disproportionate risks.
This makes cross-functional training and awareness essential. Regular, practical workshops ensure that inadvertent errors do not snowball into exposures. Active discussions with auditors add another safeguard—better to face questions internally than to be challenged by revenue authorities with penalties.
Most importantly, companies must recognize that tax non-compliance is a reputational issue. In an era of instant news and stakeholder activism, being perceived as a non-compliant organization can damage credibility far more than the financial penalties themselves.
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Tax Technology – The Future of Tax
The future of the tax function is deeply intertwined with technology. With regulators themselves adopting real-time digital tools, businesses must stay a step ahead.
- Automation of compliance via ERP-tax integration and AI-driven reconciliations.
- Analytics and dashboards (Power BI, Tableau) for real-time visibility on exposures and cash flows.
- Blockchain for tamper-proof transparency in supply chains and cross-border tax flows.
- Generative AI to draft submissions, predict litigation outcomes, and manage voluminous documentation.
This is reshaping professional expectations. The tax leader of tomorrow will be a techno-commercial strategist—a Chartered Accountant with fluency in AI, blockchain, machine learning, and data visualization. The “boring” function of yesterday is now one of the most future-forward professions.
Continuous Learning – A Tax Imperative
If there is one constant in tax, it is change. New regulations, new technologies, and evolving stakeholder expectations make continuous learning non-negotiable. Regular trainings both within tax teams and across business functions are the only way to stay ready for the future.
Conclusion – The Strategic Backbone
Tax has travelled from the back office to the boardroom, transforming into a strategic backbone of business. By combining litigation closure, strategic foresight, risk-balancing, compliance ownership, technology adoption, and continuous learning, tax professionals today are far more than compliance officers.
They are trusted advisors, business enablers, and future-ready leaders—ensuring that organizations don’t just stay compliant, but thrive in a complex, transparent, and rapidly evolving global environment.
