Transfer pricing audit
This query is : Resolved
Kapil Bhatia
(Querist)
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.
Kapil Bhatia
(Querist)
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**.
---
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Transfer of Physical Stock Between Two Proprietorship Concerns
- MSME disclosure and disallowance
- Taxation of crypto futures in India Fy 2026- 2027
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
