Quick Summary
Rationalisation of transfer pricing provisions for carrying out multi-year arm's length price determination Transfer pricing provisions enable computation of income arising from an international transaction or a specified domestic transaction with regard to an arm's length price. These provisions a
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FAQ :
The main goal is to streamline transfer pricing provisions and reduce the compliance and administrative burden by allowing for multi-year Arm's Length Price (ALP) determination.
If an option is exercised and approved, the ALP determined for a specific financial year will apply to similar transactions for the two consecutive years immediately following it.
The Transfer Pricing Officer (TPO) will review and approve the option exercised by the assessee, subject to prescribed conditions.
These amendments will take effect from April 1st, 2026, and will apply to the assessment year 2026-27 and subsequent assessment years.
Businesses will experience a reduced compliance burden as they won't need to repeat the same arm's length analysis for similar transactions every year.
No, the provisions for exercising the option and consequent proceedings will not apply to any proceedings under Chapter XIV-B.
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