Urgent- transfer pricing applicable or not

Tax queries 414 views 2 replies

Dear Respected Members my queries is like this-

1. There are 2 PVt. Ltd. Companies, one of the director is common ,the compainies are closely held companies, and the directors are brother also.

2. Both the co. are profit making companies and are taxable at the same rate of tax.

3. Non of the co. is availing any exemptions, benifits or tax holidays.

4. One co.( say A)  has sold some material to the other  (say B) co. , who has used the same for manufacturing .The total transaction is more than Rs. 500 lacs/ 5 crore.

MY Questions are-

1. Whether domestic transfer pricing is applicable to these companies or not?

2..If yes then on which co.? 

3. If no then why not applicable ?

 

Replies (2)

The following transactions are covered within the ambit of domestic transfer pricing (DTP) regulations

• Expenditure under section 40A(2)

• Transfer of goods and services between the tax holiday undertaking and other undertakings of the taxpayer

• Business transacted between the tax holiday undertaking and other ‘closely connected entities’

• Any other notified transaction

The Act prescribes a safe harbour i.e. minimum threshold of 5 crore INR (i.e. 50 million INR) on an aggregate basis in order to apply the provisions..

 

PLEASE TELL ME ON WHICH CO IT IS APPLICABLE 

 


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