Ministry of Finance issues revised guidelines for compounding of offence under the Income -Tax Act, 1961

Ministry of Finance

   

On 16-9-2022 the CBDT has issued revised guidelines for compounding of offence under the Income-Tax Act, 1961 to simplify and facilitate compounding of offences under Income Tax Act, 1961 with reference to various offences covered under the prosecution provisions of the Act.

Key Points:

  • Offence punishable under Section 276 of IT Act, 1961 have been made compoundable. Section 276 deals with Removal, concealment, transfer or delivery of property to thwart tax recovery.

  • Offence under Direct Taxes Laws where case of an applicant, who has convicted earlier with imprisonment for less than two years being previously non-compoundable has now been made compoundable.

  • Relaxation of time: Time limit for acceptance of compounding application has been relaxed with the approval of Chief Commissioner of Income Tax from the earlier limit of 24 months to 36 months now. In such cases where relaxation has been provided compounding charges would be @1.5 times more than the normal compounding charges.

  • Complexity in procedure has been simplified now by intimating the applicant that the application is found acceptable or non-acceptable along with compounding charges.

  • Compounding charges for failure to pay Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) @2% per month up to 3 months and 3% per month beyond 3 months have been reduced to 1% and 2% respectively.


*Disha Srivastava, Publication Assistant has reported this brief.

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