Guidelines for compounding of offence under Direct Tax Laws Clarification - Income Tax - F.No.285/62/98-IT (Inv.)/22

F.No.285/62/98-IT (Inv.)/22 dated 26.03.1999: Sub : Guidelines for compounding of offence under Direct Tax Laws Clarification The Board are of the view that for the purpose of computing compounding fee, the amount of tax should be the tax as modified by appeal / revision / rectification etc. provided such revised order has become final. This is based on the rationale that if the assessment and/ or tax payable has been revised as a result of any subsequent order the tax computed in original assessment gets modified to that extent. It is therefore reiterated that while sending the compounding proposals for approval of the Board, the CCsIT/DGsIT may take this into consideration and compounding fee should be calculated accordingly. It has now been reduced to 2% per month or part of a month of the tax to be calculated as above. Section 276C(1): Wilful attempt to evade tax, etc. Under the existing guidelines, the fee is: (a) If the amount sought to be evaded is less than Rs. One Lakh, the compounding fees shall be 100% of amount sought to be evaded. (b) If the amount sought to be evaded is more than Rs. One Lakh, the compounding fee shall be 200% of the amount sought to be evaded. It has now been reduced to 50% of amount sought to be evaded irrespective of the amount sought to be evaded. Other provisions of the existing guidelines and clarifications issued subsequently from time to time shall continue to be applicable, Above amendments shall be applicable to future as well as to cases pending at any stage. However, the offences already compounded shall not be reconsidered, These amendments shall apply mutates mutandis to offences under the other Direct Tax Laws also. These amendments may be brought to all concerned and be given wide publicity