The Tax Policy Research Unit (TPRU was set up by the Finance Ministry on the Recommendations of the reports of the Tax Administration Reform Commission (TARC),with an aim to bring consistency,  multidisciplinary inputs, and coherence in Policy making. TPRU comprises of officers from both the Central Board of Direct Taxes(CBDT) and Central Board of indirect tax and customs (CBIC) as well as economists, and statisticians.

The Major objectives of TPRU include the following.

i)    Carry  out studies on various topics of  fiscal and tax policies referred to it by CBDT  and CBIC and to Provide independent analysis on such topics

ii)    Prepare and disseminate policy papers and background papers on variousctax policy isuues,

iii)   Assist the Tax policy council (TPC) chaired by FM in taking appropriate tax policy decisions,

iv)   Liaise with the state Commercial tax Departments. 

The mandate of TPRU includes examining and providing analytical inputs on each tax proposal on the following three broad lines

I)    The legislative  intent behind the proposal, i.e., why this proposal is being framed and what is the objective,

II)    Expected increase or decrease in tax collection through the proposal,

III)    The likely economic impact through the proposal, other than the effect  on tax collection.