Transfer pricing audit
This query is : Resolved
18 April 2014
What is transfer pricicing audit.
18 April 2014
AS we have tax audit there is similar concept of transfer pricing audit which means all the section and rules for transfer pricing like sec 92-92D and other rules are followed or not?
if there is deviation whther int or penalty is paid or not ect.
if there is deviation whther int or penalty is paid or not ect.
21 June 2014
In FY 2012-2013 Purchases was Exceeding Rs 5 crore from my associate concerns and my company was covered under Transfer Pricing Audit.
But IN 2013-14 purchases from our associate concen is less than Rs.5 Crores. Should I Audit under Transfer pricing or not.
But IN 2013-14 purchases from our associate concen is less than Rs.5 Crores. Should I Audit under Transfer pricing or not.
02 August 2025
Great set of questions. Let’s walk through the answers clearly and concisely for you.
---
## ✅ **1. What is Transfer Pricing Audit?**
A **Transfer Pricing (TP) Audit** under Indian tax law refers to:
> 🔎 A **special audit conducted by a Chartered Accountant (CA)** to verify whether **international or specified domestic transactions** between **associated enterprises (AEs)** are done at **arm’s length price (ALP)** — as required under **Sections 92 to 92F** of the Income Tax Act, 1961.
---
### 📄 **Form 3CEB**:
* The audit is reported in **Form 3CEB**, filed along with the tax return.
* It includes:
* Details of international/SDT transactions,
* Method used to compute ALP,
* CA’s opinion on compliance.
---
## ✅ **2. Are TP Provisions Still Applicable in FY 2013–14 If Purchases ₹5 crore** from your **associate concern**.
* ✅ If the associate concern qualifies as an **AE**, and the transaction was **international** or a **specified domestic transaction**, then **TP audit under Section 92E** was applicable.
### 📅 **FY 2013–14**:
* ❌ Purchases from AE were **less than ₹5 crore**.
* So, do TP audit requirements still apply?
---
### ✅ **Answer: It Depends.**
### 🔸 If It's an **International Transaction**:
> ✅ **TP audit is required** if the value of **all international transactions with AEs** during the year **exceeds ₹1 crore (₹10 million)**.
So:
* If **total international transaction value TP audit is applicable **only if SDT exceeds ₹5 crore** in aggregate for FY 2013–14.
📌 From **FY 2016–17 onwards**, SDT threshold was raised to ₹20 crore.
📌 From **FY 2017–18**, most SDTs (like transactions between same tax rate entities) were removed from TP scope.
---
## ✅ Summary Table:
| Condition | FY 2012–13 | FY 2013–14 |
| ----------------------------------- | ---------- | ----------------------------- |
| Purchases from AE | ₹5 Cr+ | < ₹5 Cr |
| Is it an International Transaction? | Yes | Yes? |
| Threshold for TP audit | ₹1 Cr | ₹1 Cr |
| Audit under Sec 92E needed? | Yes | ✅ Only if total value ≥ ₹1 Cr |
---
## ✅ Practical Action:
👉 **Check total value** of international (or SDT) transactions with AEs in FY 2013–14.
* If it’s **less than ₹1 crore**, **no Form 3CEB required**.
* If **≥ ₹1 crore**, you must **get the TP audit done** and file **Form 3CEB**.
---
---
## ✅ **1. What is Transfer Pricing Audit?**
A **Transfer Pricing (TP) Audit** under Indian tax law refers to:
> 🔎 A **special audit conducted by a Chartered Accountant (CA)** to verify whether **international or specified domestic transactions** between **associated enterprises (AEs)** are done at **arm’s length price (ALP)** — as required under **Sections 92 to 92F** of the Income Tax Act, 1961.
---
### 📄 **Form 3CEB**:
* The audit is reported in **Form 3CEB**, filed along with the tax return.
* It includes:
* Details of international/SDT transactions,
* Method used to compute ALP,
* CA’s opinion on compliance.
---
## ✅ **2. Are TP Provisions Still Applicable in FY 2013–14 If Purchases ₹5 crore** from your **associate concern**.
* ✅ If the associate concern qualifies as an **AE**, and the transaction was **international** or a **specified domestic transaction**, then **TP audit under Section 92E** was applicable.
### 📅 **FY 2013–14**:
* ❌ Purchases from AE were **less than ₹5 crore**.
* So, do TP audit requirements still apply?
---
### ✅ **Answer: It Depends.**
### 🔸 If It's an **International Transaction**:
> ✅ **TP audit is required** if the value of **all international transactions with AEs** during the year **exceeds ₹1 crore (₹10 million)**.
So:
* If **total international transaction value TP audit is applicable **only if SDT exceeds ₹5 crore** in aggregate for FY 2013–14.
📌 From **FY 2016–17 onwards**, SDT threshold was raised to ₹20 crore.
📌 From **FY 2017–18**, most SDTs (like transactions between same tax rate entities) were removed from TP scope.
---
## ✅ Summary Table:
| Condition | FY 2012–13 | FY 2013–14 |
| ----------------------------------- | ---------- | ----------------------------- |
| Purchases from AE | ₹5 Cr+ | < ₹5 Cr |
| Is it an International Transaction? | Yes | Yes? |
| Threshold for TP audit | ₹1 Cr | ₹1 Cr |
| Audit under Sec 92E needed? | Yes | ✅ Only if total value ≥ ₹1 Cr |
---
## ✅ Practical Action:
👉 **Check total value** of international (or SDT) transactions with AEs in FY 2013–14.
* If it’s **less than ₹1 crore**, **no Form 3CEB required**.
* If **≥ ₹1 crore**, you must **get the TP audit done** and file **Form 3CEB**.
---
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