Quick Summary
Key Changes Aim to Simplify the Process and Enhance Compliance The Central Board of Direct Taxes (CBDT) has issued Circular No. 04/2025 dated March 17, 2025, providing Frequently Asked Questions (FAQs) on the revised guidelines for the Compounding of Offences under the Income Tax Act, 1961. These r
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FAQ :
The revised guidelines aim to simplify the compounding process, making it more accessible and efficient for taxpayers, and to enhance compliance.
Yes, unlike previous guidelines, the revised rules allow for the compounding of all offences under the Income Tax Act, 1961.
Yes, the previous time limit of 36 months for filing a compounding application has been removed, and taxpayers can now file multiple applications.
Offences under Section 275A and Section 276B, which relate to tax evasion and TDS defaults, are now eligible for compounding.
No, applications that were pending before October 17, 2024, will automatically be considered under the new guidelines without requiring a fresh submission.
The competent authority to process compounding applications includes the Principal Chief Commissioner (Pr. CCIT), Chief Commissioner (CCIT), Principal Director General (Pr. DGIT), or Director General (DGIT).
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