According to revenue department officials, the compounding fee for default of less than Rs 1 lakh on tax deduction at source (TDS) will be reduced to 2 per cent from 5 per cent. For defaults over Rs 1 lakh, the charge will be cut to 2 per cent from 10 per cent.
The officials said Finance Minister Jaswant Singh wanted to create an environment that would result in settlement of 75 per cent of the prosecution cases. Many of these cases had been pending for over 15 years, they said.
Similarly, the compounding fee charged by the department for late filing would be scaled down from 5 per cent to 2 per cent, the officials said. A circular on the new rates for compounding fees would be issued within the next few days, they added.
At the current rate of disposal, it might take about 70-80 years for the settlement of 27,000 prosecution cases, the officials estimated. Singh
