The Central Board of Direct Taxes has issued revised Guidelines for Compounding of offences under the Income-tax Act, 1961 (the 'Act') dated September 16, 2022 with reference to various offences covered under the prosecution provisions of the Act.
The Union Finance Ministry stated in a release some major changes in the guidelines included making offence punishable under Section 276 of the Act as compoundable. Further, the scope of eligibility for compounding of cases has been relaxed whereby case of an applicant who has been convicted with imprisonment for less than two years being previously non-compoundable, has now been made compoundable.The discretion available with the competent authority has also been suitably restricted, it said.
According to the revised guidelines, the time limit for acceptance of compounding applications has been relaxed from the earlier limit of 24 months to 36 months now, from the date of filing of complaint.
Specific upper limits have been introduced for the compounding fee covering defaults across several provisions of the Act. Additional compounding charges in the nature of penal interest @ 2% per month up to three months and three per cent per month beyond three months have been reduced to 1 per cent and 2 per cent respectively.
The revised Guidelines for Compounding of offences dated 16.09.2022 are available on http://www.incometaxindia.gov.in.