The Government has released Draft Form No. 48, prescribing a comprehensive reporting framework under Section 172 of the Income Tax Act, 2025 for international transactions and specified domestic transactions.
The draft form significantly expands disclosure requirements for transfer pricing compliance and mandates certification by a Chartered Accountant. It aims to standardize reporting, improve transparency, and strengthen arm's length price (ALP) determination procedures.
What Is Draft Form 48?
Draft Form 48 is a report to be furnished by an accountant relating to:
- International transactions
- Deemed international transactions
- Specified domestic transactions
The form requires detailed disclosures of transactions with Associated Enterprises (AEs), benchmarking methods adopted, adjustments made, and documentation maintained.
It mirrors the government's intent to align compliance requirements with global transfer pricing standards.
Key Highlights of Draft Form 48
1. Detailed AE Disclosure Requirements
Assessees must disclose:
- List of Associated Enterprises (AEs)
- Country of residence
- PAN/TIN or unique identifier
- Nature of relationship under Section 162
Both international and specified domestic AEs must be separately reported.
2. Transaction-Wise Reporting
Each transaction must be reported with:
- Transaction ID
- Nature and type of transaction
- Amount received and paid
- Arm's length price
- Adjustment amount
The draft includes an exhaustive list of transaction categories such as:
- Purchase and sale of goods
- Transfer of tangible and intangible assets
- Royalty arrangements
- Capital financing transactions
- Corporate guarantees
- Provision and receipt of services
- Business restructuring transactions
3. Advance Pricing Agreement (APA) Reporting
If the assessee is a signatory to an APA, details such as:
- Date of agreement
- Acknowledgement number
- Covered transactions
- Amount covered under APA
must be disclosed.
This ensures consistency between APA filings and annual reporting.
Arm's Length Price Determination Framework
Part E of Draft Form 48 requires detailed benchmarking disclosures under Section 165, including selection of the most appropriate method:
- Comparable Uncontrolled Price (CUP)
- Resale Price Method (RPM)
- Cost Plus Method (CPM)
- Profit Split Method (PSM)
- Transactional Net Margin Method (TNMM)
- Other Method
The form also mandates:
- Comparable margin disclosures
- Arithmetic mean, median, percentile ranges
- Detailed computation sheets
- Adjustment reporting mechanism
Where no adjustment is required, the aggregate transaction value becomes the arm's length price.
Documentation & Compliance Threshold
If the aggregate value of international transactions exceeds ₹1 crore, or if specified domestic transactions are reported, additional documentation requirements apply.
The assessee must confirm whether prescribed information and documents have been maintained under Section 171.
Mandatory Accountant Certification
The report must be certified by a Chartered Accountant holding a valid certificate of practice under the Chartered Accountants Act, 1949 and governed by the Institute of Chartered Accountants of India.
The accountant must certify:
- Examination of books and records
- Maintenance of prescribed documentation
- Accuracy of particulars furnished
- Compliance with Section 172
Membership number, firm registration number, and UDIN are mandatory.
Why Draft Form 48 Is Important
The draft format signals a more structured and technology-driven transfer pricing regime under the new Income-tax framework.
Key implications include:
- Increased compliance scrutiny
- Standardized benchmarking disclosures
- Greater emphasis on documentation
- Clear reporting of adjustments
- Stronger alignment with global TP norms
For multinational companies and domestic groups engaged in inter-company transactions, Draft Form 48 significantly raises the level of reporting detail.
What Taxpayers Should Do
- Review all international and domestic related-party transactions
- Revisit benchmarking studies
- Ensure documentation under Section 171 is updated
- Cross-check APA coverage
- Prepare transaction-level reconciliation
Early preparation will be critical once the form is officially notified.
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