Transfers Pricing

How to justified transfer pricing i.e transaction done at Arms length price.

how to check it is correct or not and what is parameters
Replies (2)
Quick Summary
This discussion explains how to justify transfer pricing, ensuring transactions are conducted at an arm's length price. It details the various methods prescribed for determining this price, including comparable uncontrolled price, resale price, cost plus, profit split, and transactional net margin methods. The content also references relevant tax rules and external guides for further clarification on arm's length transactions between related parties.

92C. (1) The arm’s length price in relation to an international transaction [or specified domestic transaction] shall be determined by any of the following methods, being the most appropriate method, having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors as the Board may prescribe, namely :—

(a) comparable uncontrolled price method;

(b) resale price method;

(c) cost plus method;

(d) profit split method;

(e) transactional net margin method;

(f) such other method as may be prescribed by the Board.

 

Also refer::  1.  https://incometaxindia.gov.in/Pages/rules/income-tax-rules-1962.aspx   Rule 10B...

&/or 2. https://tallysolutions.com/us/business-guides/arms-length-transaction/

Transactions between related parties are generally required to meet an arm's length transaction standard, which means the price is comparable to what it would have been if the parties were not related. slope unblocked

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