CBDT Issues Guidelines for Compounding of Offences under Income-Tax Act 1961

Date: October 18, 2024
Categories: #CBDTNotification #TaxCircular #IncomeTaxAct1961
Read Time: 4 Min

The Central Board of Direct Taxes (CBDT) has released updated guidelines (F.No. 285/08/2014-IT(lnv.V)/163) on October 17, 2024, for the compounding of offences under the Income-Tax Act, 1961. These guidelines provide a comprehensive framework for taxpayers seeking relief from prosecution for tax-related offences.

Key Highlights of the Compounding Guidelines:

  1. Applicability:

Offences under Chapter XXII of the Income Tax Act can be compounded by authorities like the Principal Chief Commissioner or Director General of Income Tax.

Applications can be submitted for both new and pending cases, even after prosecution begins. Rejected applications can be resubmitted if rejection was due to curable defects such as non-payment of taxes or incorrect information.

  1. Compounding Application:

Applicants must file a prescribed form, pay non-refundable fees, and ensure all taxes, interest, and penalties are cleared before applying.

Consolidated applications can cover multiple offences or years.

  1. Conditions:

Offences can be compounded if the applicant satisfies all conditions, including payment of all outstanding dues, withdrawal of related appeals, and consolidation of offences where applicable.

  1. Approval Requirements:

Certain sensitive cases, like those involving anti-national activities or offences under laws like the Black Money Act, require higher-level approval from the CBDT Chairman.

  1. Procedure:

Authorities will review applications and issue compounding orders. Extensions for payments can be granted up to 24 months. Non-compliance may result in rejection and prosecution.

  1. Compounding Charges:

Charges vary based on the nature of the offence, with higher charges for repeat offences. Interest and penalties are excluded from the tax calculations for compounding fees.

  1. Co-accused:

Joint or separate applications can be filed for offences committed by companies or Hindu Undivided Families (HUFs), and compounding charges apply to all involved.

For detailed information on how to apply for tax offence compounding, ensure compliance with these new guidelines.

IncomeTaxAct #CBDT #TaxRelief #CompoundingOfOffences #TaxGuidelines #TaxUpdates #TaxCompliance

Share on Facebook Share on Twitter