The Question on Department of Revenue
Q3. With reference to the Government of India, consider the information:
| Organization | Some of its functions | It works under |
|---|---|---|
| I. Directorate of Enforcement | Enforcement of the Fugitive Economic Offenders Act, 2018 | Internal Security Division-1, Ministry of Home Affairs |
| II. Directorate of Revenue Intelligence | Enforced the Provisions of the Customs Act, 1962 | Department of Revenue, Ministry of Finance |
| III. Directorate General of Systems and Data Management | Carrying out big data analytics to assist tax officers for better policy and nabbing tax evaders | Department of Revenue, Ministry of Finance |
In how many of the above rows is the information correctly matched?
Options:
a) Only one
b) Only two ✅
c) All the three
d) None
The Answer
Correct Answer: (b) Only two ✅
Row-wise evaluation:
| Row | Function Correct? | Department Correct? | Result |
|---|---|---|---|
| I | ✅ Yes — Directorate of Enforcement enforces the Fugitive Economic Offenders Act, 2018, Prevention of Money Laundering Act, 2002, and Foreign Exchange Management Act, 1999 | ❌ No — It works under the Department of Revenue, Ministry of Finance, not the Ministry of Home Affairs | ❌ Incorrect |
| II | ✅ Yes — Directorate of Revenue Intelligence enforces the Customs Act, 1962 and over fifty allied acts including the Arms Act, Narcotic Drugs and Psychotropic Substances Act, COFEPOSA, Wildlife Protection Act, and Antiquities Act | ✅ Yes — It functions under the Department of Revenue, Ministry of Finance, through the Central Board of Indirect Taxes and Customs | ✅ Correct |
| III | ✅ Yes — Directorate General of Systems and Data Management provides information technology systems, big data analytics, and digital platforms to assist tax officers and enforcement of tax policies | ✅ Yes — It functions under the Department of Revenue, Ministry of Finance, through the Central Board of Indirect Taxes and Customs and Central Board of Direct Taxes | ✅ Correct |
Conclusion: Only Rows II and III are correct → Answer: Only two
Key Government Directorates under the Department of Revenue
| Organization | Year of Establishment | Function (One-line) | Parent Ministry / Board |
|---|---|---|---|
| Directorate of Enforcement (Department of Revenue) | 1957 | Enforces Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, and Fugitive Economic Offenders Act, 2018 to combat economic crimes | Department of Revenue, Ministry of Finance |
| Directorate of Revenue Intelligence | 1957 | Apex anti-smuggling agency, enforces Customs Act, 1962 and allied laws, prevents smuggling, trade fraud, drug trafficking, and illegal wildlife trade | Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance |
| Directorate General of Systems and Data Management | — (part of Central Board of Indirect Taxes and Customs ICT projects) | Implements automated information technology systems, centralized data management, and analytics to support tax administration | Central Board of Indirect Taxes and Customs and Central Board of Direct Taxes, Department of Revenue, Ministry of Finance |
One-line Explainers
- Directorate of Enforcement (Department of Revenue) → Investigates money laundering, foreign exchange violations, and fugitive economic offenders under FEMA, PMLA, and FEOA,
- Directorate of Revenue Intelligence → Detects and prevents smuggling of contraband, drug trafficking, illicit trade in wildlife, and commercial frauds under Customs Act, 1962 and allied laws.
- Directorate General of Systems and Data Management → Develops and maintains automated tax systems, centralized computer facilities, data communication networks, and analytics platforms for tax policy and enforcement.
About the Department of Revenue
The Department of Revenue is a key department under the Ministry of Finance, Government of India, responsible for administration, monitoring, and supervision of all direct and indirect Union taxes.
Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Department
Leadership: Led by the Secretary (Revenue) under the overall direction of the Union Finance Minister.
Boards: Two statutory boards manage taxation matters:
Central Board of Direct Taxes (CBDT): Handles income tax, corporation tax, capital gains tax, estate duty, wealth tax, expenditure tax, gift tax, and related matters.
Central Board of Indirect Taxes and Customs (CBIC): Handles Goods and Services Tax (GST), Customs Duty, Central Excise duties, and allied indirect taxes.
Board Composition: Each board is headed by a Chairman, who is also ex officio Special Secretary to the Government of India. Currently, both CBDT and CBIC have six Members each.
Legal Basis: Boards were constituted under the Central Board of Revenue Act, 1963.
Functions under the Government of India (Allocation of Business) Rules, 1961:
- Grants-in-aid to the National Institute of Public Finance and Policy
- Stamp duties on various instruments like bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, shares, debentures
- Administration of income tax (except Income-tax Appellate Tribunal), corporation tax, capital gains tax, estate duty, wealth tax, expenditure tax, gift tax, and Railway Passenger Fares Act
- Administration of Benami Transactions (Prohibition) Act, 1988
- Administration of Narcotic Drugs and Psychotropic Substances Act, 1985
- Administration of Customs, GST, and Central Excise matters
- Preventive detention for conservation/augmentation of foreign exchange and prevention of smuggling activities (COFEPOSA)
- Enforcement of Prevention of Money Laundering Act, 2002 and Foreign Exchange Management Act, 1999
Management of subordinate organizations such as:
- Income Tax Department
- Customs Department
- Goods and Services Tax Department
- Directorate of Enforcement
- Central Bureau of Narcotics
- Directorate General of Revenue Intelligence
- Directorate General of Systems & Data Management
- Financial Intelligence Unit
- Goods and Services Tax Network
Practice Questions
Q3.1 Which of the following organizations works under the Department of Revenue, Ministry of Finance?
a) Directorate of Enforcement
b) Directorate of Revenue Intelligence
c) Directorate General of Systems and Data Management
d) All of the above ✅
Q3.2 The Directorate of Enforcement is responsible for enforcing which of the following Acts?
a) Customs Act, 1962
b) Prevention of Money Laundering Act, 2002 ✅
c) Arms Act
d) Wildlife Protection Act
Also View: Alternative Investment Funds – UPSC Prelims 2025 — Q1 (Set A)
Also View: Sources of Income of RBI: UPSC Prelims 2025 Question 2
FAQs
Q1. What is the main objective of the Directorate of Enforcement (Department of Revenue)?
To enforce Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, and Fugitive Economic Offenders Act, 2018, and investigate economic crimes in India.
Q2. What is the primary role of the Directorate of Revenue Intelligence?
It is the apex anti-smuggling agency, responsible for enforcing the Customs Act, 1962 and allied laws, preventing smuggling, drug trafficking, wildlife/antiquities trade, and commercial frauds.
Q3. What does the Directorate General of Systems and Data Management do?
Provides information technology systems, automated processes, centralized data management, and analytics to support tax officers and improve policy enforcement.
Q4. Under which Ministry do these directorates function?
All operate under the Department of Revenue, Ministry of Finance, Government of India.
Q5. When was the Directorate of Revenue Intelligence constituted?
It was constituted in 1957, as India’s apex anti-smuggling intelligence and investigation agency.
About The Author
