CBDT revises Form 161 for penalty waiver on income misreporting

The Central Board of Direct Taxes (CBDT) on 8 October introduced a revised Form 161, allowing eligible taxpayers, including individuals, to apply for waiver of penalty imposed for misreporting of income or other cases. The notification was published in the e-gazette of India and is effective from 8 October.

The revised form expands the scope of immunity, which previously excluded misreporting of income. Taxpayers must meet conditions including paying tax and interest within the demand notice period, paying additional income-tax of 100% or 120% of tax on under-reported income, and not having filed an appeal. The application must be submitted within one month from the end of the month the order is received. The Assessing Officer must decide within three months from the end of the month of receipt.

Chartered Accountant Suresh Surana, speaking to ET Wealth Online, called the amendment a welcome development that could help resolve disputes early and reduce litigation. However, he noted the relief is subject to conditions and is not automatic. Isha Sekhri of Isha Sekhri & Associates, speaking to Livemint, said the change reflects a fundamental shift, as the revised form now requires details of penalty orders and evidence of additional income-tax payment.