India maintains tolerance band for transfer pricing adjustments
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

India maintains tolerance band for transfer pricing adjustments

India’s taxpayers have received welcome news from the Income Tax Department that the tolerance band for transfer pricing adjustments will remain at 5% for financial year 2011 to 2012.

india-map150.png

However, for financial year 2012 to 2013 the tolerance band will go down to 3%.

Taxpayers can be reassured though that transactions during the 2011 to 2012 year that vary from the arm’s-length price by up to 5% will not be subject to an adjustment.

Section 92 of the Income Tax Act 1961 states: “...the Central Government hereby notifies that where the variation between the arm's-length price determined under section 92C and the price at which the international transaction has actually been undertaken does not exceed 5% of the latter, the price at which the international transaction has actually been undertaken shall be deemed to be the arm's-length price for assessment year 2012-13.”

more across site & bottom lb ros

More from across our site

The Labour Party is working hard to convince business that it will bring stability to tax policy if it wins the next UK general election. But it will be impossible to avoid creating winners and losers
Burrowes had initially been parachuted into the role last summer to navigate the fallout from the firm’s tax leaks scandal
Barbara Voskamp is bullish on hiring local talent to boost DLA Piper’s Singapore practice, and argues that ‘big four’ accountants suffer from a stifled creativity
Chris Jordan also said that nations have a duty to scrutinise the partnership structures of major firms, while, in other news, a number of tax teams expanded their benches
KPMG has exclusive access to the tool for three years in the UK, giving it an edge over ‘big four’ rivals
But the US tax agency’s advice is consistent with OECD guidance and shouldn’t surprise anyone, other experts tell ITR
A survey of more than 25,000 in-house counsel reveals that diversity initiatives are a high priority when choosing external counsel
The report is aimed at helping 'low-capacity countries', the OECD has claimed
The UK tax agency appears to be going after easier, lower value targets, one lawyer has claimed
Criminal experts have told ITR that the case of Ulf Johannemann emphasises the fine line between tax avoidance and tax evasion
Gift this article