New Delhi, Sep 24 (IANS): The Indian government plans to develop a new building at a cost of Rs.485.16 crore that will house the head offices of the country's direct as well as indirect tax administration.

The federal cabinet, at a meeting chaired by Prime Minister Manmohan Singh, Tuesday approved the construction of the new building to be called Rajaswa Bhawan.

It will be located at Kasturba Gandhi Marg, in the central part of the national capital.

The estimated cost of the project is Rs.485.16 crore. The cabinet has also gave approval for Rs.15 crore as annual recurring expenditure after completion of the project.

The new building constructed at a 5.65 acre plot will be the headquarters of the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC). Both these boards are currently headquartered in North Block.

These boards, besides advising the government on tax policies, are responsible for the overall administration of field offices under them. The two boards are the largest revenue collectors for the Indian government.

“The growth in revenue collection over the years has led to expansion of the Directorates as well as staff under the Boards, and North Block does not have the capacity to accommodate all these offices,” the finance ministry said in a statement after the cabinet meeting here.

“Therefore, a composite building bringing together both the Boards and associated offices will improve efficiency immensely, as appropriate physical infrastructure and work environment are important contributors to overall efficiency in tax administration,” it said.