CBDT issues Revised Guidelines for Compounding Offences under IT Act 1961

The Central Board of Direct Taxes (CBDT) has issued revised guidelines for compounding offences under the Income-tax Act, 1961, effective from October 17, 2024. These guidelines aim to simplify the compounding process, addressing complexities from multiple previous guidelines, and lowering compounding charges. Key changes include eliminating the categorization of offences, removing the limit on the number of occasions for filing applications, and allowing fresh applications upon curing defects. The guidelines also permit compounding of offences under sections 275A and 276B, and remove the existing 36-month time limit for filing applications. Additionally, the requirement for the main accused to file the application has been dispensed with, allowing any co-accused to do so. The compounding charges have been rationalized, including the abolition of interest on delayed payments and reduced rates for various offences. These changes aim to promote ease of compliance and streamline the compounding process.