Section 279(2) → Section 395
Compounding of offenses
Quick Answer
Section 279(2) of the Income Tax Act, 1961 (Compounding of offenses) corresponds to Section 395 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 279(2)
Provision Summary
Allows a taxpayer to pay a 'Compounding Fee' to avoid jail/prosecution.
Sec 395
Provision Summary
Retained and Encouraged. The department's policy is to 'Compound' (settle) most first-time offenses for a fee.
Key Changes & Highlights
- Compounding application must be filed within specified months from the first notice.
Frequently Asked Questions
What does Section 279(2) of the Income Tax Act 1961 deal with?
Section 279(2) (Compounding of offenses) Allows a taxpayer to pay a 'Compounding Fee' to avoid jail/prosecution.
What is the new section number for Section 279(2) under the Direct Tax Code 2025?
Section 279(2) of the ITA 1961 maps to Section 395 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 279(2) under the new tax code?
Section 279(2) is marked as "Retained" with status "Active". Impact: High - The ultimate 'get out of jail' card for taxpayers.
What are the key changes to Section 279(2) under DTC 2025?
Compounding application must be filed within specified months from the first notice.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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