NISHITH.TV
  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York

Locations

  • Mumbai
  • Silicon Valley
  • Bengaluru
  • Singapore
  • Mumbai BKC
  • New Delhi
  • Munich
  • New York
  • Content
  • Home
  • ABOUT US
  • NDA in the Media
  • Areas of Service
  • Research and Articles
  • Opportunities
  • Contact
  • NDACloud
  • Client Access
  • Member Access
  • Events and Calender
  • How we perform
  • Knowledge anywhere, anytime
  • See our recent deals
  • Up to date legal developments
  • Case studies in M&A

Research and Articles

HTMLPDF

  • Research at NDA
  • Research Papers
  • Research Articles
  • NDA Think Tanks
  • NDA Hotline
  • New Ali Gunjan
  • Japan Desk ジャパンデスク

NDA-Hotline


  • Capital Markets Hotline
  • Companies Act Series
  • Climate Change Related Legal Issues
  • Competition Law Hotline
  • Corpsec Hotline
  • Court Corner
  • Cross Examination
  • Deal Destination
  • Debt Funding in India Series
  • Dispute Resolution Hotline
  • Education Sector Hotline
  • FEMA Hotline
  • Financial Service Update
  • Food & Beverages Hotline
  • Funds Hotline
  • Gaming Law Wrap
  • GIFT City Express
  • Green Hotline
  • HR Law Hotline
  • iCe Hotline
  • Insolvency and Bankruptcy Hotline
  • International Trade Hotlines
  • Investment Funds: Monthly Digest
  • IP Hotline
  • IP Lab
  • Legal Update
  • Lit Corner
  • M&A Disputes Series
  • M&A Hotline
  • M&A Interactive
  • Media Hotline
  • New Publication
  • Other Hotline
  • Pharma & Healthcare Update
  • Private Client Wrap
  • Private Debt Hotline
  • Private Equity Corner
  • Real Estate Update
  • Realty Check
  • Regulatory Digest
  • Regulatory Hotline
  • Renewable Corner
  • SEZ Hotline
  • Social Sector Hotline
  • Tax Hotline
  • Technology & Tax Series
  • Technology Law Analysis
  • Telecom Hotline
  • The Startups Series
  • White Collar and Investigations Practice
  • Yes, Governance Matters.
  • Japan Desk ジャパンデスク

Tax Hotline

May 21, 2003

Guidelines for selection of cases for transfer pricing scrutiny issued

The Finance Act, 2001 introduced the transfer pricing legislation in India and also laid down detailed guidelines on the computation of the arm's length price in respect of international transactions carried on with associated enterprises ("AE"). The Finance Act, 2002 introduced the role of Transfer Pricing Officers ("TPOs") to be appointed for verifying the arm's length computation of the cases selected for scrutiny.

The Finance Ministry has now issued the following administrative guidelines specifying the criteria for selection of transactions for scrutiny by Assessing Officers ("AOs") and the process of verification by the TPOs:

  • A floor level of Rs. 5 crore has been set for picking up international transactions for transfer pricing scrutiny;
  • Cases where the aggregate value of more than one transaction with the same AE or transactions with more than one AE, exceed Rs. 5 crore only can be selected for scrutiny and referred to the TPO;
  • Before making a reference to the TPO, the AO is required to satisfy himself that the international transaction under consideration is with an AE. However, the AO will not have the authority to scrutinize the correctness or otherwise of the price at which the transaction has been entered into;
  • The TPO is required to take into account all the relevant facts and data for determining the arm's length price and is also required to use the most appropriate method for the computation as stipulated under law;
  • The TPO is then required to issue a detailed order showing the method of computation and details of data used and reasons thereto for arriving at the arm's length price;
  • Before making any adjustments in the total income declared by the assessee in his tax return, it is mandatory to give the assessee a formal opportunity of being heard.

The CBDT has set a deadline of June 30, 2003 for the AOs to select cases for scrutiny for the first set of returns filed with transfer pricing disclosures for the financial year ended March 31, 2002.

 
 

Source: The Economic Times, May 21, 2003

Mission and Vision


Distinctly Different

What's New


Differential economic rights of AIF LPs under threat
Investment Funds: Monthly Digest: May 31,2023
Manner of computation of Net Winnings prescribed for online gaming companies!
Tax Hotline : May 30,2023

Events


Webinars

Generative Artificial Intelligence: Legal, Ethical and Policy Implications
June 01,2023 - June 01,2023

Seminar

Winning Together: Exploring the dynamics of India-Singapore relations for Fund Structuring and Deal Making
April 26,2023 - April 26,2023

This event is over. For event material please click here


Round Table

Investing In Net Zero
July 22,2022 - July 22,2022

This event is over. For event material please click here

News Roundup


News Articles

Naked Licensing in Trademarks
April 14,2023

Quotes

AI holds massive potential for malicious use, but who will be held accountable?
May 25,2023

Newsletters


Investment Funds: Monthly Digest

Differential economic rights of AIF LPs under threat
May 31,2023

Tax Hotline

Manner of computation of Net Winnings prescribed for online gaming companies!
May 30,2023

New Publication

Time for Evolution of Sport Adjudication in India
May 29,2023

  • Disclaimer
  • Content
  • Feedback
  • Walkthrough
  • Subscribe
Nishith Desai Associates@2016 All rights reserved.