Use this skill whenever asked about India transfer pricing rules, documentation requirements, or CBDT transfer pricing compliance. Trigger on phrases like "transfer pricing India", "Indian TP documentation", "Form 3CEB", "master file India", "local file India", "CbCR India", "APA India", "Section 92", "safe harbour India", "specified domestic transactions", or any question about intercompany pricing for Indian entities.
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Identify associated enterprises and covered transactions
Map the group and determine which counterparties are associated enterprises under s 92A. Classify each dealing as an international transaction (s 92B) or a specified domestic transaction (s 92BA), and schedule every covered transaction with its counterparty, nature and value in INR.
Watch for: TP provisions apply to all international transactions with associated enterprises, and to specified domestic transactions once the aggregate SDT threshold is crossed.
Income-tax Act 1961 ss 92A, 92B, 92BA
Run the FAR analysis and select the most appropriate method
Perform a functions, assets and risks (FAR) analysis for each covered transaction, then select the most appropriate method from CUP, RPM, CPM, TNMM, PSM or the Other Method, based on transaction nature, the FAR profile and data reliability.
Watch for: The arm's length price is computed under the most appropriate of the six prescribed methods; no method has automatic priority.
Income-tax Act 1961 s 92C; IT Rules r 10C
Every figure is drawn from this Tax Guide and cited to its source.
Fee — unilateral
INR 10 lakhRules 10F-10T
Fee — bilateral/multilateral
INR 20 lakhRules 10F-10T
Duration
5 years prospective + 4 years rollbackITA s 92CC
6+ comparables
35th to 65th percentileRule 10CA
< 6 comparables
Arithmetic meanRule 10CA
Local File (Rule 10D)
International transactions > INR 1 crore; or SDT > INR 20 croreIT Rules r 10D
Master File (Form 3CEAA)
Group revenue > INR 500 crore AND intl transactions > INR 50 crore or intangibles > INR 10 croreIT Rules r 10DA
CbCR (Form 3CEAD)
Group revenue > INR 6,400 croreITA s 286
Form 3CEB
31 October of AYITA s 92E
ITR (TP cases)
Reviewed against the cited tax authorities by Mayur Deokar on 2026-06-06.
Items flagged for further clarification are tracked separately and excluded here.
This block is generated from verified skill_facts — edit the facts, not the prose.
Quick Reference
| Field | Value |
|---|---|
| Country | India (Republic of India) |
| Tax authority | Central Board of Direct Taxes (CBDT); Transfer Pricing Officer (TPO) |
| Key TP legislation | Sections 92-92F, Income Tax Act, 1961; Rules 10A-10E, Income Tax Rules, 1962 |
| Documentation | Rule 10D (Local File); Rule 10DA (Master File); Section 286/Rule 10DB (CbCR) |
| Reporting | Section 92E / Form 3CEB (Accountant's Report) |
| OECD member? | No (but BEPS Inclusive Framework member) |
| BEPS signatory? | Yes (Inclusive Framework) |
| Currency | INR |
| Documentation language | English |
| Assessment Year (AY) basis | AY = FY + 1 (e.g., FY 2024-25 = AY 2025-26) |
| Skill version | 1.0 |
Local File (Rule 10D Documentation)
| Item | Detail |
|---|---|
| Required? | Yes, for all entities with international transactions > INR 1 crore; or SDT > INR 20 crore |
| Format | Per Rule 10D: description of transactions, FAR analysis, method selection, comparables, financial data |
| Timing | Contemporaneous; maintained by income tax return due date |
| Retention | 8 years from end of relevant AY |
Master File (Form 3CEAA)
| Item | Detail |
|---|---|
| Required? | Yes, if: (a) consolidated group revenue > INR 500 crore AND (b) aggregate international transactions > INR 50 crore OR intangible transactions > INR 10 crore |
| Filing deadline | 30 November of AY (same as ITR due date for TP cases) |
| Content | Part A: group information, entity details; Part B: detailed master file per OECD standards |
Accountant's Report (Form 3CEB)
| Item | Detail |
|---|---|
| Required? | Yes, for ALL entities with international transactions or specified domestic transactions (SDT) |
| Filed by | Independent Chartered Accountant |
| Deadline | 31 October of AY |
| Content | Certification that TP documentation maintained; details of each transaction, method, arm's length price |
Country-by-Country Report (Form 3CEAD)
| Item | Detail |
|---|---|
| Threshold | Consolidated group revenue > INR 6,400 crore (≈ EUR 750 million) |
| Filing deadline | 12 months after end of reporting accounting year of UPE |
| Notification | Form 3CEAC (identifying reporting entity): due 2 months before CbCR deadline |
| Content | Per OECD Annex III: jurisdiction-wise revenue, profit, tax, employees, assets |
Accepted Methods (Section 92C)
| Method | Accepted |
|---|---|
| Comparable Uncontrolled Price (CUP) | Yes |
| Resale Price Method (RPM) | Yes |
| Cost Plus Method (CPM) | Yes |
| Transactional Net Margin Method (TNMM) | Yes |
| Profit Split Method (PSM) | Yes |
| "Other Method" (including DCF) | Yes (sixth method, any method yielding most reliable result) |
Filing Obligations
| Obligation | Detail |
|---|---|
| Form 3CEB (Accountant's Report) | Annual electronic filing; 31 October |
| Local File (Rule 10D) | Maintain; provide within 30 days of request |
| Master File (Form 3CEAA) | Annual electronic filing; 30 November |
| CbCR notification (Form 3CEAC) | Annual; 2 months before CbCR deadline |
| CbCR (Form 3CEAD) | Annual; 12 months after UPE's year-end |
| Income Tax Return | 30 November (for TP cases) |
Deadlines
| Item | Deadline |
|---|---|
| Form 3CEB filing | 31 October of AY |
| Income Tax Return (TP cases) | 30 November of AY |
| Local File maintenance | By ITR due date (30 November) |
| Provision on TPO request | Within 30 days |
| Master File (Form 3CEAA) | 30 November of AY |
| CbCR notification (Form 3CEAC) | 2 months before CbCR due date |
| CbCR (Form 3CEAD) | 12 months after end of UPE's reporting year |
Penalties
| Offence | Section | Penalty |
|---|---|---|
| Failure to furnish Form 3CEB | 271BA | INR 1,00,000 (INR 1 lakh) |
| Failure to maintain/furnish TP documentation | 271G | 2% of value of each international/SDT transaction |
| Failure to report or incorrect reporting | 271AA(1) | 2% of value of each transaction |
| Failure to furnish Master File | 271AA(2) | INR 5,00,000 (INR 5 lakh) |
| Failure to furnish CbCR (Form 3CEAD) | 286(6) | INR 5,000/day (up to 1 month); INR 15,000/day beyond 1 month; INR 50,000/day after penalty order |
| Inaccurate CbCR | 286(7) | INR 5,00,000 |
| Under-reporting of income (TP adjustment) | 270A | 50% of tax on under-reported income; 200% if misreporting |
Advance Pricing Agreements (APA)
| Item | Detail |
|---|---|
| Availability | Yes (active program since 2012) |
| Types | Unilateral, Bilateral, Multilateral |
| Governing legislation | Section 92CC-92CD ITA; Rule 10F-10T |
| Application | To CBDT; Form 3CED with prescribed fee |
| Fees | INR 10 lakh (unilateral); INR 20 lakh (bilateral/multilateral) |
| Duration | 5 years prospective |
| Rollback | Available for 4 prior AYs (subject to conditions) |
| Processing time | Unilateral: 12-18 months; Bilateral: 24-48 months |
| Annual compliance report | Required (Form 3CEF) |
| Safe Harbour interaction | Separate from APA program |
India has formal Safe Harbour Rules (Rule 10TD-10TG):
Safe Harbours table
| Transaction Type | Safe Harbour Margin/Rate |
|---|---|
| IT/ITeS services (turnover ≤ INR 200 crore) | Operating profit/operating cost ≥ 17% (to AE) or 17% (non-AE) |
| IT/ITeS services (turnover > INR 200 crore) | Operating profit/operating cost ≥ 18% |
| KPO services (turnover ≤ INR 200 crore) | Operating profit/operating cost ≥ 18% |
| KPO services (turnover > INR 200 crore) | Operating profit/operating cost ≥ 18% |
| Contract R&D (wholly/partly) | Operating profit/operating cost ≥ 24% |
| Manufacturing with insignificant risk | Operating profit/operating cost ≥ 12% |
| Intra-group loans (INR) | 1-year MCLR + 175 bps (capped at INR 100 crore) |
| Intra-group loans (Foreign currency) | 6-month SOFR + relevant spread |
| Corporate guarantee | 1% per annum (or 4% for associated enterprises with below investment grade) |
Recent Developments
| Date | Development |
|---|---|
| 2025 | Income-tax Act, 2025 (new code) receives assent; TP framework carried forward |
| 2026 | Form 3CEB proposed to be replaced by Form 48 (data-rich, machine-readable format) |
| 2025-26 | New Income-tax Rules, 2026 introduce graded penalties for delayed accountant's reports |
| 2024 | Safe Harbour Rules updated thresholds and rates |
| 2024 | Continued high volume of APA completions |
| Ongoing | India actively participating in BEPS Pillar One/Two discussions |
| Ongoing | Block assessment scheme introduced from Tax Year 2026-27 |
| 2021 | CbCR threshold revised to INR 6,400 crore (from INR 5,500 crore) |
Interaction with Other Skills
| Related skill | Interaction |
|---|---|
| india-corporate-tax | TP adjustments directly affect taxable income under ITA |
| india-gst | TP adjustments may affect valuation for GST on related-party transactions |
| india-bookkeeping | Indian accounting records (Ind-AS/Indian GAAP) support TP documentation |
| Specified Domestic Transactions | SDT rules (Section 92BA) apply TP provisions to certain domestic related-party transactions |
| Form 3CEB | Gateway filing; triggers TP audit jurisdiction |
| CbCR | Used by CBDT for risk-based audit selection and case referral to TPO |
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed
Reviewed by Mayur Deokar · 6 June 2026
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other India computations in the OpenAccountants Tax Library.
Benchmark comparables and determine the arm's length price
Build a comparables set for the tested party, compute the tested margin or price and derive the ALP. With 6 or more comparables apply the 35th to 65th percentile range; with fewer than 6 use the arithmetic mean. A controlled price inside the band needs no adjustment; otherwise adjust to the range/mean.
Watch for: The range concept sets the tolerance band, and a controlled price within the band is treated as arm's length.
IT Rules r 10CA
Test safe harbour and APA eligibility
Check whether a transaction qualifies for a Safe Harbour margin (IT/ITeS, KPO, contract R&D, low-risk manufacturing, intra-group loans, corporate guarantee) and whether electing it (Form 3CEFA) beats full benchmarking. For high-value or recurring dealings, consider an APA (Form 3CED).
Watch for: Electing an available safe harbour margin removes the benchmarking dispute for that transaction where the return meets or exceeds the prescribed margin; an APA fixes the method prospectively.
IT Rules rr 10TD-10TG; Income-tax Act 1961 s 92CC; IT Rules rr 10F-10T
Determine documentation obligations (Local File, Master File, CbCR)
Test each threshold separately: maintain the Local File (Rule 10D) where international transactions or SDT exceed their values; prepare the Master File (Form 3CEAA) where the group revenue plus transaction or intangible thresholds are met; and file CbCR (Form 3CEAD) with the Form 3CEAC notification where consolidated group revenue exceeds the CbCR threshold.
Watch for: Documentation tiers are threshold-driven and independent; retain the Local File for 8 years from the end of the relevant AY.
IT Rules rr 10D, 10DA, 10DB; Income-tax Act 1961 s 286
Obtain the accountant's report in Form 3CEB
Have an independent Chartered Accountant certify every international transaction and SDT, the method applied and the ALP in Form 3CEB, and file it electronically. This report is mandatory for all entities with covered transactions, regardless of value.
Watch for: Form 3CEB is compulsory for any entity with an international transaction or SDT and is the gateway filing that triggers TP jurisdiction.
Income-tax Act 1961 s 92E; Form 3CEB
Diarise deadlines and quantify penalty exposure
Schedule Form 3CEB by 31 October of the AY, the income tax return by 30 November, the Master File by 30 November, and the CbCR notification 2 months before the CbCR due date. Flag the penalty exposure for each potential miss, including under-reporting on any TP adjustment.
Watch for: Late or missing filings attract fixed and value-based penalties across Form 3CEB, TP documentation, Master File, CbCR and under-reported income.
Income-tax Act 1961 ss 92E, 139, 271BA, 271G, 271AA, 286(6), 270A
Assemble the working paper and offer review
Compile the transaction schedule, method selection, benchmarking and ALP, documentation-threshold conclusions and the Form 3CEB position into a single working paper. Present it as a working paper, not a filed return, and offer Mayur Deokar a review before filing.
What Mayur checks before signing off
Ready to work through your own numbers? Add this Guide to your AI and it takes it from here, then routes the finished paper for an accountant to review.
Add to your AI30 November of AYITA s 139
Master File
30 November of AYIT Rules r 10DA
CbCR notification (Form 3CEAC)
2 months before CbCR deadlineITA s 286
Failure to furnish Form 3CEB
INR 1,00,000ITA s 271BA
Failure to maintain TP docs
2% of transaction valueITA s 271G
Failure to furnish Master File
INR 5,00,000ITA s 271AA(2)
CbCR failure
₹5,000/day (1 mo); ₹15,000/day (beyond); ₹50,000/day (after order)ITA s 286(6)
Under-reporting (TP adjustment)
50% of tax; 200% if misreportingITA s 270A
IT/ITeS (≤ ₹200 Cr turnover)
OP/OC ≥ 17%Rule 10TD
IT/ITeS (> ₹200 Cr)
OP/OC ≥ 18%Rule 10TD
Contract R&D
OP/OC ≥ 24%Rule 10TD
Manufacturing (insignificant risk)
OP/OC ≥ 12%Rule 10TD
Corporate guarantee
1% p.a. (4% below investment grade)Rule 10TD
Fee — unilateral
INR 10 lakhRules 10F-10T
Fee — bilateral/multilateral
INR 20 lakhRules 10F-10T
Duration (APA)
5 years prospective + 4 years rollbackITA s 92CC
6+ comparables (Range Concept)
35th to 65th percentileRule 10CA
< 6 comparables (Range Concept)
Arithmetic meanRule 10CA
Quick Reference
| Field | Value | |---|---| | Country | India (Republic of India) | | Tax authority | Central Board of Direct Taxes (CBDT); Transfer Pricing Officer (TPO) | | Key TP legislation | Sections 92-92F, Income Tax Act, 1961; Rules 10A-10E, Income Tax Rules, 1962 | | Documentation | Rule 10D (Local File); Rule 10DA (Master File); Section 286/Rule 10DB (CbCR) | | Reporting | Section 92E / Form 3CEB (Accountant's Report) | | OECD member? | No (but BEPS Inclusive Framework member) | | BEPS signatory? | Yes (Inclusive Framework) | | Currency | INR | | Documentation language | English | | Assessment Year (AY) basis | AY = FY + 1 (e.g., FY 2024-25 = AY 2025-26) | | Skill version | 1.0 |
Local File (Rule 10D Documentation)
| Item | Detail | |---|---| | Required? | Yes, for all entities with international transactions > INR 1 crore; or SDT > INR 20 crore | | Format | Per Rule 10D: description of transactions, FAR analysis, method selection, comparables, financial data | | Timing | Contemporaneous; maintained by income tax return due date | | Retention | 8 years from end of relevant AY |
Master File (Form 3CEAA)
| Item | Detail | |---|---| | Required? | Yes, if: (a) consolidated group revenue > INR 500 crore AND (b) aggregate international transactions > INR 50 crore OR intangible transactions > INR 10 crore | | Filing deadline | 30 November of AY (same as ITR due date for TP cases) | | Content | Part A: group information, entity details; Part B: detailed master file per OECD standards |
Accountant's Report (Form 3CEB)
| Item | Detail | |---|---| | Required? | Yes, for ALL entities with international transactions or specified domestic transactions (SDT) | | Filed by | Independent Chartered Accountant | | Deadline | 31 October of AY | | Content | Certification that TP documentation maintained; details of each transaction, method, arm's length price |
Country-by-Country Report (Form 3CEAD)
| Item | Detail | |---|---| | Threshold | Consolidated group revenue > INR 6,400 crore (≈ EUR 750 million) | | Filing deadline | 12 months after end of reporting accounting year of UPE | | Notification | Form 3CEAC (identifying reporting entity): due 2 months before CbCR deadline | | Content | Per OECD Annex III: jurisdiction-wise revenue, profit, tax, employees, assets |
Arm's length price definition
Income from international transactions with associated enterprises shall be computed with regard to the arm's length price. Section 92B defines "international transaction" broadly.Section 92(1)
Accepted Methods (Section 92C)
| Method | Accepted | |---|---| | Comparable Uncontrolled Price (CUP) | Yes | | Resale Price Method (RPM) | Yes | | Cost Plus Method (CPM) | Yes | | Transactional Net Margin Method (TNMM) | Yes | | Profit Split Method (PSM) | Yes | | "Other Method" (including DCF) | Yes (sixth method, any method yielding most reliable result) |
Most Appropriate Method
The most appropriate method considering the nature of transaction, functions/assets/risks, and availability of reliable data must be selected.Rule 10C
Range Concept
For datasets with 6+ comparable data points: arm's length range is the 35th to 65th percentile. For fewer than 6: arithmetic mean applies.
Filing Obligations
| Obligation | Detail | |---|---| | Form 3CEB (Accountant's Report) | Annual electronic filing; 31 October | | Local File (Rule 10D) | Maintain; provide within 30 days of request | | Master File (Form 3CEAA) | Annual electronic filing; 30 November | | CbCR notification (Form 3CEAC) | Annual; 2 months before CbCR deadline | | CbCR (Form 3CEAD) | Annual; 12 months after UPE's year-end | | Income Tax Return | 30 November (for TP cases) |
Deadlines
| Item | Deadline | |---|---| | Form 3CEB filing | 31 October of AY | | Income Tax Return (TP cases) | 30 November of AY | | Local File maintenance | By ITR due date (30 November) | | Provision on TPO request | Within 30 days | | Master File (Form 3CEAA) | 30 November of AY | | CbCR notification (Form 3CEAC) | 2 months before CbCR due date | | CbCR (Form 3CEAD) | 12 months after end of UPE's reporting year |
Penalties
| Offence | Section | Penalty | |---|---|---| | Failure to furnish Form 3CEB | 271BA | INR 1,00,000 (INR 1 lakh) | | Failure to maintain/furnish TP documentation | 271G | 2% of value of each international/SDT transaction | | Failure to report or incorrect reporting | 271AA(1) | 2% of value of each transaction | | Failure to furnish Master File | 271AA(2) | INR 5,00,000 (INR 5 lakh) | | Failure to furnish CbCR (Form 3CEAD) | 286(6) | INR 5,000/day (up to 1 month); INR 15,000/day beyond 1 month; INR 50,000/day after penalty order | | Inaccurate CbCR | 286(7) | INR 5,00,000 | | Under-reporting of income (TP adjustment) | 270A | 50% of tax on under-reported income; 200% if misreporting |
Advance Pricing Agreements (APA)
| Item | Detail | |---|---| | Availability | Yes (active program since 2012) | | Types | Unilateral, Bilateral, Multilateral | | Governing legislation | Section 92CC-92CD ITA; Rule 10F-10T | | Application | To CBDT; Form 3CED with prescribed fee | | Fees | INR 10 lakh (unilateral); INR 20 lakh (bilateral/multilateral) | | Duration | 5 years prospective | | Rollback | Available for 4 prior AYs (subject to conditions) | | Processing time | Unilateral: 12-18 months; Bilateral: 24-48 months | | Annual compliance report | Required (Form 3CEF) | | Safe Harbour interaction | Separate from APA program |
Safe Harbours table
| Transaction Type | Safe Harbour Margin/Rate | |---|---| | IT/ITeS services (turnover ≤ INR 200 crore) | Operating profit/operating cost ≥ 17% (to AE) or 17% (non-AE) | | IT/ITeS services (turnover > INR 200 crore) | Operating profit/operating cost ≥ 18% | | KPO services (turnover ≤ INR 200 crore) | Operating profit/operating cost ≥ 18% | | KPO services (turnover > INR 200 crore) | Operating profit/operating cost ≥ 18% | | Contract R&D (wholly/partly) | Operating profit/operating cost ≥ 24% | | Manufacturing with insignificant risk | Operating profit/operating cost ≥ 12% | | Intra-group loans (INR) | 1-year MCLR + 175 bps (capped at INR 100 crore) | | Intra-group loans (Foreign currency) | 6-month SOFR + relevant spread | | Corporate guarantee | 1% per annum (or 4% for associated enterprises with below investment grade) |
Safe Harbour application
Application via Form 3CEFA; election by ITR due date.
Recent Developments
| Date | Development | |---|---| | 2025 | Income-tax Act, 2025 (new code) receives assent; TP framework carried forward | | 2026 | Form 3CEB proposed to be replaced by Form 48 (data-rich, machine-readable format) | | 2025-26 | New Income-tax Rules, 2026 introduce graded penalties for delayed accountant's reports | | 2024 | Safe Harbour Rules updated thresholds and rates | | 2024 | Continued high volume of APA completions | | Ongoing | India actively participating in BEPS Pillar One/Two discussions | | Ongoing | Block assessment scheme introduced from Tax Year 2026-27 | | 2021 | CbCR threshold revised to INR 6,400 crore (from INR 5,500 crore) |
Interaction with Other Skills
| Related skill | Interaction | |---|---| | india-corporate-tax | TP adjustments directly affect taxable income under ITA | | india-gst | TP adjustments may affect valuation for GST on related-party transactions | | india-bookkeeping | Indian accounting records (Ind-AS/Indian GAAP) support TP documentation | | Specified Domestic Transactions | SDT rules (Section 92BA) apply TP provisions to certain domestic related-party transactions | | Form 3CEB | Gateway filing; triggers TP audit jurisdiction | | CbCR | Used by CBDT for risk-based audit selection and case referral to TPO |
Rendered from the canonical facts model · method attested Jun 6, 2026 (covers the method, not the currency of individual figures). General reference only — confirm with a qualified professional before acting.
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