Revised Guidelines for Compounding Offences by Income Tax Department

For the betterment of the people who wish to start their business, the official department of the direct taxes i.e. the Central Board of Direct Taxes (CBDT) has issued revised guidelines for compounding of offences under the Income Tax Act 1961.

Taking into consideration the government policy and with the aim of facilitating ease of doing business and decriminalization of offences, the government department has introduced some steps revised guidelines for compounding of offences under the Income Tax Act.

To ease the burden of taxpayer and to benefit them, offense covered under Section 276 are now considered as “compoundable”.

*Compoundable Offence – are the offences that can be compromised for which the complainant can agree to take back the charges levied against the accused.

As per the previous law, the applicant who is convicted with imprisonment for less than 2 years was considered as a non-compoundable interest. However revised guidelines for compounding of offences has made the imprisonment for less than 2 years a compoundable offence.

*Non-Compoundable Offence – are the offences that cannot be compromised and are serious in nature and is a criminal offence.

And the Central Board of Direct Taxes confirmed that “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 a complaint. Procedural complexities have also been reduced/simplified”