Rule 119 of the Draft Income-tax Rules, 2026lays down the procedure for renewing an agreement. It provides that a request for renewal must be made as a fresh application in Form No. 54 for agreement. The renewal process is required to follow the same procedural framework applicable to a new agreement under the rules. However, the rule specifically excludes the requirement of pre-filing consultation as referred to in Rule 105. This means that while the applicant must comply with the prescribed application format and procedural requirements for entering into an agreement, the preliminary consultation stage is not mandatory for renewal. The provision ensures procedural uniformity between fresh applications and renewals while simplifying the process by dispensing with pre-filing consultation. Accordingly, renewal is not automatic but subject to a structured application process consistent with the broader regulatory framework governing such agreements.
Extract of Rule No. 119 and 120 of Draft Income-tax Rules, 2026
Rule 119
Renewing an agreement.
Request for renewal of an agreement may be made as a new application in Form No. 54 for agreement, using the same procedure as outlined in these rules except pre-filing consultation as referred to in rule 105.
Rule 120
Miscellaneous.
(1) Mere filing of an application for an agreement under these rules shall not prevent the operation of Chapter X of the Act for determination of arms’ length price under that Chapter till the agreement is entered into.
(2) The negotiation between the competent authority of India and the competent authority of the other country or countries, in case of bilateral or multilateral agreement, shall be carried out in accordance with the provisions of the tax treaty between India and the other country or countries.
