Finance Minister P Chidambaram on Wednesday asked income tax officials to be friendlier with those taxpayers who readily complied with tax laws and act tough only with a few who were defiant.

"The (IT) department needs to become friendlier towards the bulk of taxpayers, who were voluntarily complying with the tax laws and tough on the minuscule minority of recalcitrant taxpayers," Chidambaram said at an interaction with Chief Commissioners of Income Tax through video conferencing.

He complimented the Chief Commissioners for the "remarkable" performance of the department, particularly on the revenue side. The finance minister said the department had done well in collecting higher revenues in 2006-07 and was performing even better in 2007-08.

Total direct tax collections were up 42.8 per cent till December 2007, while collection of personal income tax was even higher. The finance minister outlined the factors responsible for the unprecedented growth in revenue collection such as moderate tax rates, change in taxpayer's behaviour towards better compliance with tax laws and a technology-driven tax department, which had become more taxpayer friendly.

Chidambaram said he had sanctioned an incentive of Rs 195 crore (Rs 1.95 billion) to enable the department to improve infrastructure for increasing its operational efficiency by providing more vehicles and telephones.

The finance minister said the department would need to find better ways and means to utilise the sanctioned amount for a lasting impact on its functioning, according to an official release in New Delhi.