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Compounding of Prosecution

Various Offences committed by the person under the provisions of the law / Act which are liable to be prosecuted as per Act / guidelines specified by the Department, the said offence can be compounded at any stage of legal / Income tax proceedings by following a procedure prescribed under the Income tax Act, 1961 and by paying compounding charges as determined by the Competent Authority.

Frequently Asked Questions

Compounding of prosecution is a legal process through which a taxpayer can settle criminal prosecution proceedings by paying prescribed compounding charges, subject to approval by the Income Tax authorities.

Any taxpayer against whom prosecution proceedings have been initiated under the Income Tax Act may apply for compounding, provided they meet the eligibility conditions laid down in CBDT guidelines.

Compounding charges depend on the nature of the offence, relevant section involved (such as Sections 276C, 276CC, 277), amount of tax evaded, and the period of default, as per CBDT compounding guidelines.

Yes, compounding can be allowed even after a prosecution complaint has been filed in court, subject to approval from the competent authority.

Generally required documents include the compounding application, affidavit, undertaking, proof of tax and penalty payment, and a copy of the prosecution complaint.
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