Income-tax Act, 2025

Advance pricing agreement - Section 168

Advance pricing agreement.

168. (1) The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, determining the

(a) arm's length price or specifying the manner in which the arm's length price is to be determined, in relation to an international transaction to be entered into by that person;

(b) income referred to in section 9(2), or specifying the manner in which the said income is to be determined, as is reasonably attributable to the operations carried out in India by or on behalf of that person, being a non-resident.

(2) The manner of determination of the arm's length price referred to in sub-section (1)(a) or the income referred to in sub-section (1)(b) may include, respectively,

(a) the methods referred to in section 165(1); or

(b) the methods provided by rules made under this Act,

with such adjustments or variations, as may be necessary or expedient so to do.

(3) Irrespective of anything contained in section 165 or 166 or the methods provided by rules made under this Act,

(a) the arm's length price of any international transaction; or

(b) the income referred to in sub-section (1)(b),

in respect of which the advance pricing agreement has been entered into, shall be determined as per the advance pricing agreement so entered.

(4) The agreement referred to in sub-section (1) shall be valid for such period not exceeding five consecutive tax years as specified in the agreement.

(5) The advance pricing agreement entered into shall be binding

(a) on the person in whose case, and in respect of the transaction in relation to which, the agreement has been entered into; and

(b) on the Principal Commissioner or Commissioner, and the income-tax authorities subordinate to him, in respect of the said person and the said transaction.

(6) The agreement referred to in sub-section ( .... To read the full section download the app from Google Play store