Relatd party transaction in tax audit report

Transactions (sale / purchase / expenses reimbursement / Loan given /received and many more) with holding companies / subsidiary companies / assisocated companies / key managerial person situated in india or outside india.

refer related party disclousre standard for more details.

Originally posted by : Sanjay Ghewade
	can anyone explain me what does mean related party transactions.....................

Section 40A (2) is applicable for related party transaction under Income Tax Act

As per Section 40A(2)(a) Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person who is related as per section 40A(2)(b) and the Assessing Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction;

Refer AS 18, Section 297,299,301 of Companies act and 40A(2) Of income tax act,1961.