Compounding of tax offences permits administrative settlement subject to eligibility, prescribed fees, procedural limits and exclusions. Compounding under the Income-tax Act permits the CCIT/DGIT to compound certain Chapter XXII offences classified as Category 'A' or 'B' when prescribed eligibility conditions are met, including payment of outstanding tax and an undertaking to pay compounding charges. The competent CCIT/DGIT must follow a prescribed procedure-processing by the Assessing Officer, disposal by speaking order within set time limits, communication and collection of compounding charges with limited extensions, and issuance of the compounding order after payment-subject to exclusions for specified classes of offenders and situations and to prescribed fee formulas and minimums; the Finance Minister may relax exclusions in exceptional cases.