The Central Board of Direct Taxes (CBDT) on October 17, 2024, issued revised guidelines for compounding offences under the Income-tax Act, 1961.
The following has been stated namely: -
• The revised guidelines supersede all existing guidelines on the subject and would apply to pending as well as new applications, from the date of its issue.
• The guidelines have been simplified by eliminating offence categorization, removing limits on application filings, allowing fresh applications for cured defects, permitting compounding of offences under sections 275A and 276B, and removing the 36-month filing limit from the complaint date.
• It also states that compounding charges have been rationalized by abolishing interest on delayed payments, reducing TDS default rates to a single 1.5% per month, simplifying the calculation for non-filing returns, and removing separate compounding fees for co-accused.
