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The central board of direct taxes on Saturday issued revised guidelines for compounding of offences under the Income Tax Act,1961.
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.
Under the new rules, offence punishable under Section 276 have been made compoundable.
Section 276 allows prosecution proceedings to be initiated against any taxpayer who fraudulently removes, conceals, transfers any property to prevent it from being attached for recovery of tax.
There are also other changes on the scope of eligibility for compounding of cases.
Lastly, the additional compounding charges [penal interest] at 2% per month up to 3 months and 3% per month beyond 3 months have been reduced to 1% and 2% respectively.
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