The resignation has been accepted by the prime minister.
Shome joined on October 1, 2004, for three years and his tenure had recently been extended till October 2009. However, he has decided to move on, sources in the finance ministry told Business Standard, saying he had not decided which of the options open before him will be exercised.
With his departure, the team making Budget 2008-09 will be significantly different from the one that made Budget 2007-08 (the chief economic advisor, revenue secretary and finance secretary are all new to their present posts and were not present when Budget 2007-08 was made).
Among Shome's main contributions during his stint in the finance ministry has been his work that paved the way for introduction of the value-added tax (VAT) at the state level in April 2005, something previous Union governments had been struggling with for several years.
He found himself in the hot seat after the 2005 Budget the only budget during the United Progressive Alliance (UPA) tenure that made significant changes on the tax front.
He was part of Chidambaram's team that faced flak for introducing two controversial taxes - the fringe benefits tax and the banking cash transaction tax (BCTT).
Shome is co-convener of a committee that is working towards the introduction of a goods and services tax and is the chief architect of a report on it, which is pending with the empowered group of state finance ministers (on which he is a permanent invitee).
Shome also headed a committee for computerisation of the income tax department and represented the department of revenue in the Prime Minister's Trade and Economic Relations Committee.
He headed finance ministry delegations to the OECD Conference on Taxation Issues to Seoul, Korea, in September 2006, and to Brazil on the use of information technology for the department of revenue in March 2007.
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