Income tax

Taxpayers will benefit as government decriminalizes certain offenses under income tax law

In line with the Government’s policy to facilitate the conduct of business and the decriminalization of offences, the Central Board of Direct Taxes (CBDT) has issued revised guidelines for the composition of various offenses under the Income Tax Act. revenue.

Some of the key changes to benefit taxpayers include making the offense punishable under section 276 of the act as compoundable, according to a statement from the CBDT.

Section 276 deals with the removal, concealment, transfer or delivery of property to thwart the collection of tax.

In addition, the scope of eligibility for case composition has been relaxed, so that the case of an applicant who has been sentenced to a term of imprisonment of less than 2 years and who was previously not likely to be composed, is henceforth rendered capable of being composed. The discretionary power available to the competent authority has also been appropriately restricted.

The time limit for accepting requests for composition has been relaxed from the previous limit of 24 months to 36 months now, from the date of filing of the complaint.

The complexity of procedures has also been reduced.

Specific upper limits have been introduced for compound charges covering breaches of several provisions of the law. Additional compound charges in the form of penalty interest @ 2% per month up to 3 months and 3% per month beyond 3 months have been reduced to 1% and 2% respectively.

Detailed revised guidelines for compounding offenses dated 16.09.2022 are available at http://www.