PremiumThe Central Board of Direct Taxes (CBDT) said on Saturday it has revised the guidelines for compounding of income tax related offences as part of the government’s policy of facilitating ease of doing business and decriminalization of offences.
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The Central Board of Direct Taxes (CBDT) said on Saturday it has revised the guidelines for compounding of income tax related offences as part of the government’s policy of facilitating ease of doing business and decriminalization of offences.
An official statement from CBDT said that the revised guidelines for compounding of offences were issued on Friday.
Some of the major changes made for the benefit of taxpayers include making offence punishable under Section 276 of the Income Tax Act as compoundable, CBDT said. This section deals with removal, concealment, transfer or delivery of property to thwart tax recovery. It provides for punishment with rigorous imprisonment for up to two years and a fine.
CBDT said the scope of eligibility for compounding of cases has also 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.
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. Procedural complexities have also been reduced/simplified.
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 at the rate of 2% per month up to 3 months and 3% per month beyond 3 months have been reduced to 1% and 2% respectively.