About This Service
Compounding is a “Legal Settlement.” If a taxpayer commits a serious offence (like tax evasion or wilful fraud) that could lead to Jail/Prosecution, they can apply for “Compounding.” This means the taxpayer admits the mistake, pays the tax + interest + a “Compounding Fee,” and in return, the department drops all criminal charges. It’s a way to buy your freedom and avoid a permanent criminal record.
Eligibility & Criteria
- Compounding Fee (2026):
- GST: Minimum of 50% of tax involved (min ₹10,000) to a maximum of 150% (max ₹30,000 for minor offences, higher for major).
- Income Tax: 2% to 5% of the tax amount per month of default, depending on the section.
- Penalty for Rejection: If compounding is rejected, the Prosecution continues, which can lead to imprisonment from 6 months to 7 years.
- Our Value-Added Service: Negotiation & Clean Exit. We handle the complex application process and represent you before the Commissioner to ensure your application is accepted, saving you from the trauma of a court trial.
Critical Compliance Info
Why Clients Trust Our "Virtual CFO" Litigation Team?
"We don't wait for the fire to start; we build fireproof systems. But if a notice does arrive, we don't just 'fill a form.' We analyze the Department's Logic, find the Legal Gaps, and file a response so strong that the case is closed at the first stage itself.
In 2026, tax is no longer about 'who you know,' it’s about 'what your data says.' We make sure your data speaks the language of compliance."
Strategic CFO Services
| Service | Deliverable | Benefits For Our Client |
|---|---|---|
| Notice Reply | Admissibility Report + Detailed Response | Zero-Error Guarantee: We match your reply with AIS/TIS data. |
| Appeals | Grounds of Appeal + Paper Book | Success Probability: We tell you honestly whether to fight or settle. |
| Compounding | Prosecution Shield | Reputation Management: We keep your name out of the "Defaulter List." |
