Specified Domestic Transaction

What is Domestic Transfer Pricing?

Income Tax - Applicability of transfer pricing provisions was earlier limited to International Transactions only. With effect from 01.04.2013, the scope of Transfer Pricing provisions is extended to 'Specified Domestic Transactions' and is accordingly applicable from A.Y. 2013-14....

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Specified Domestic Transaction- Penalty for Concealment of Income

Income Tax - The provisions of transfer pricing are designed to keep a check on the practice of reducing the tax liability by entering into transactions at prices higher/lower than market prices with one or more associated entity....

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Related Party – AS 18 vs Transfer Pricing

Income Tax - AS 18 defines the disclosure requirements related to related party relationship and transaction between a reporting enterprise and its related parties in the financial statement of that enterprise. The basic assessment during disclosure is centered upon two things viz., who is related party and what amounts to related party transaction. A...

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Understanding Specified Domestic Transaction Provisions

Income Tax - SDT includes payments to related parties, inter-unit transfer of goods or services of profit linked tax holiday-eligible units, transactions of profit-linked tax holiday-eligible units with other parties and any other transaction that may be notified by the Central Board of Direct Taxes....

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All about form 3CEB + specified domestic transaction + international transaction

Income Tax - Transfer pricing provisions were earlier restricted to international transactions. With effect from 1.4.2013 , the scope of transfer pricing provisions gets extended to specified domestic transactions (SDT) exceeding Rupees twenty crore....

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Penalty justified for failure to maintain Transfer Pricing Documents

DCIT Vs Convergys Customer Management Group Inc. (ITAT Delhi) - DCIT Vs Convergys Customer Management Group Inc. (ITAT Delhi) It is mandatory for all taxpayers, without exception, to obtain an independent accountant’s report in respect of all international transactions between associated enterprises or specified domestic transactions. The report has to be ...

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ITAT explains legal effect of Omission of clause (i) of Section 92BA

M/s. Bhartia-SMSIL (JV) Vs ITO (ITAT Guwahati) - Since clause (i) section 92A was omitted with effect from 1st April, 2017 and the effect of such omission is that the said clause(i) was never existed in the statute. Hence, Ld. PCIT can not exercise the jurisdiction u/s 263 of the Act....

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Mere Form No. 3CEB filing cannot make assessee liable for Section 92BA investigation

Ashish Subodhchandra Shah (HUF) Vs PCIT (ITAT Ahmedabad) - Merely because a prescribed Form No. 3CEB was filed in accordance with Rule 10E r.w.s. 92BA of the Act would not make an assessee susceptible to onerous investigation proceedings on such transactions where the assessee prima facie demonstrates that Section 92BA of the Act is wholly inapplicable in a...

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TPO cannot suo-motu assume jurisdiction to determine ALP price of SDT not referred to him

Times Global Broadcasting Company Ltd vs. Union of India & Ors. (Bombay High Court) - Hon’ble Bombay High Court (HC) held that the transfer pricing officer (TPO) cannot suo-motu assume jurisdiction to determine the arm’s length price (ALP) of specified domestic transactions (SDT) not referred to him....

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Non-reporting of specified domestic transactions U/s 92BA with related parties

ACIT Vs HDFC Bank Ltd. (Bombay High Court) - Transaction of purchase of loan from HDFC ltd. would not cover within the meaning of Specified Domestic Transactions (SDTs) as the shareholding of HDFC Ltd. of 16.39% could not be clubbed with the shareholding of the HDFC Investments Ltd. of 6.25% to cross the threshold limit of substantial interest...

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How to register and submit Statement of Reportable Account

Notification No. 4 of 2018-DGIT(S) - (05/04/2018) - Procedure for registration and submission of Statement of Reportable Account as per section 285BA of Income-tax Act, 1961 read with Rule 114G of Income-tax Rules, 1962. ...

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How to register and submit statement of financial transactions (SFT)

Notification No. 3 of 2018-DGIT(S) - (05/04/2018) - Procedure for registration and submission of statement of financial transactions (SFT) as per section 285BA of Income-tax Act, 1961 read with Rule 114E of Income-tax Rules, 1962. ...

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How to register and submit Form No. 61 under Income Tax Rule 114D

Notification No. 2 of 2018-DGIT(S) - (05/04/2018) - As per sub-rule (1)(i) and sub-rule (4) of Rule 114D, the statement in Form No. 61 shall be furnished through online transmission of electronic data to a server designated for this purpose and in accordance with the data structure specified in this regard by the Principal Director General of Income-...

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How a person not having PAN can submit Form No. 60

Notification No. 1 of 2018-DGIT(S - (05/04/2018) - Under electronic verification, the individual or a person (not being a company or firm) who does not have a permanent account number and who enters into any transaction specified in under Rule 114B of the Income-tax Rules, 1962, shall make a declaration in Form No. 60 giving therein the particulars ...

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Revised Guidelines- Implementation of Transfer Pricing Provisions

Instruction No. 3/2016 - (10/03/2016) - In terms of the provisions, any income arising from an international transaction or specified domestic transaction between two or more associated enterprises shall be computed having regard to the Arm's Length Price....

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Recent Posts in "Specified Domestic Transaction"

Penalty justified for failure to maintain Transfer Pricing Documents

DCIT Vs Convergys Customer Management Group Inc. (ITAT Delhi)

DCIT Vs Convergys Customer Management Group Inc. (ITAT Delhi) It is mandatory for all taxpayers, without exception, to obtain an independent accountant’s report in respect of all international transactions between associated enterprises or specified domestic transactions. The report has to be furnished by the due date of the tax ret...

Read More

ITAT explains legal effect of Omission of clause (i) of Section 92BA

M/s. Bhartia-SMSIL (JV) Vs ITO (ITAT Guwahati)

Since clause (i) section 92A was omitted with effect from 1st April, 2017 and the effect of such omission is that the said clause(i) was never existed in the statute. Hence, Ld. PCIT can not exercise the jurisdiction u/s 263 of the Act....

Read More

Mere Form No. 3CEB filing cannot make assessee liable for Section 92BA investigation

Ashish Subodhchandra Shah (HUF) Vs PCIT (ITAT Ahmedabad)

Merely because a prescribed Form No. 3CEB was filed in accordance with Rule 10E r.w.s. 92BA of the Act would not make an assessee susceptible to onerous investigation proceedings on such transactions where the assessee prima facie demonstrates that Section 92BA of the Act is wholly inapplicable in any manner at the first instance...

Read More

What is Domestic Transfer Pricing?

Applicability of transfer pricing provisions was earlier limited to International Transactions only. With effect from 01.04.2013, the scope of Transfer Pricing provisions is extended to 'Specified Domestic Transactions' and is accordingly applicable from A.Y. 2013-14....

Read More
Posted Under: Income Tax |

Specified Domestic Transaction- Penalty for Concealment of Income

The provisions of transfer pricing are designed to keep a check on the practice of reducing the tax liability by entering into transactions at prices higher/lower than market prices with one or more associated entity....

Read More
Posted Under: Income Tax | ,

Related Party – AS 18 vs Transfer Pricing

AS 18 defines the disclosure requirements related to related party relationship and transaction between a reporting enterprise and its related parties in the financial statement of that enterprise. The basic assessment during disclosure is centered upon two things viz., who is related party and what amounts to related party transaction. A...

Read More
Posted Under: Income Tax |

TPO cannot suo-motu assume jurisdiction to determine ALP price of SDT not referred to him

Times Global Broadcasting Company Ltd vs. Union of India & Ors. (Bombay High Court)

Hon’ble Bombay High Court (HC) held that the transfer pricing officer (TPO) cannot suo-motu assume jurisdiction to determine the arm’s length price (ALP) of specified domestic transactions (SDT) not referred to him....

Read More

Non-reporting of specified domestic transactions U/s 92BA with related parties

ACIT Vs HDFC Bank Ltd. (Bombay High Court)

Transaction of purchase of loan from HDFC ltd. would not cover within the meaning of Specified Domestic Transactions (SDTs) as the shareholding of HDFC Ltd. of 16.39% could not be clubbed with the shareholding of the HDFC Investments Ltd. of 6.25% to cross the threshold limit of substantial interest of 20%. ...

Read More

Understanding Specified Domestic Transaction Provisions

SDT includes payments to related parties, inter-unit transfer of goods or services of profit linked tax holiday-eligible units, transactions of profit-linked tax holiday-eligible units with other parties and any other transaction that may be notified by the Central Board of Direct Taxes....

Read More
Posted Under: Income Tax | ,

All about form 3CEB + specified domestic transaction + international transaction

Transfer pricing provisions were earlier restricted to international transactions. With effect from 1.4.2013 , the scope of transfer pricing provisions gets extended to specified domestic transactions (SDT) exceeding Rupees twenty crore....

Read More
Posted Under: Income Tax |

How to register and submit Statement of Reportable Account

Notification No. 4 of 2018-DGIT(S) (05/04/2018)

Procedure for registration and submission of Statement of Reportable Account as per section 285BA of Income-tax Act, 1961 read with Rule 114G of Income-tax Rules, 1962. ...

Read More

How to register and submit statement of financial transactions (SFT)

Notification No. 3 of 2018-DGIT(S) (05/04/2018)

Procedure for registration and submission of statement of financial transactions (SFT) as per section 285BA of Income-tax Act, 1961 read with Rule 114E of Income-tax Rules, 1962. ...

Read More

How to register and submit Form No. 61 under Income Tax Rule 114D

Notification No. 2 of 2018-DGIT(S) (05/04/2018)

As per sub-rule (1)(i) and sub-rule (4) of Rule 114D, the statement in Form No. 61 shall be furnished through online transmission of electronic data to a server designated for this purpose and in accordance with the data structure specified in this regard by the Principal Director General of Income-tax (Systems)....

Read More

How a person not having PAN can submit Form No. 60

Notification No. 1 of 2018-DGIT(S (05/04/2018)

Under electronic verification, the individual or a person (not being a company or firm) who does not have a permanent account number and who enters into any transaction specified in under Rule 114B of the Income-tax Rules, 1962, shall make a declaration in Form No. 60 giving therein the particulars of such transaction electronically using...

Read More

Budget 2017 limits scope of Audit of Specified Domestic Transactions

Budget 2017- it is proposed to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA of the Act. Accordingly, it is also proposed to make a consequential amendment in section 40(A)(2)(b) of the Act....

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Posted Under: Income Tax |

Specified Domestic Transactions- Penalty for failure to Maintain & Keep Documents

In this article we will explain about the provisions relating to penalty for failure to keep and maintain documents in respect of specified domestic transactions. However, before understanding the penalty provisions, one should have an overview of the basic provisions of transfer pricing in relation to specified domestic transactions....

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Posted Under: Income Tax | ,

Revised Guidelines- Implementation of Transfer Pricing Provisions

Instruction No. 3/2016 (10/03/2016)

In terms of the provisions, any income arising from an international transaction or specified domestic transaction between two or more associated enterprises shall be computed having regard to the Arm's Length Price....

Read More

Transfer Pricing Applicability to Dairy Co-operative societies

Introduction As we know the Finance Act 2012 has extended the scope of Transfer Pricing provisions to ‘Specified Domestic Transactions’ (SDT) between related parties w.e.f. AY 2013-14 by inserting section 92BA. Since its introduction there was ambiguity on its applicability to cooperative societies. There was no doubt of its applicabi...

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Posted Under: Income Tax |

Income-tax (19th Amendment) Rules, 2015 related to specified domestic transaction

Notification No. 90/2015 - Income Tax (08/12/2015)

Notification No. 90/2015 - Income Tax In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 10D, for sub-rule (2A), the following sub-rule shall be substituted, namely:- (2A) Nothing contained in sub-rule (1), in so far as it relates to an eligible specified domestic transaction referred to in rule 10 THB , sh...

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Domestic Transfer Pricing – The Current Scenario

Transfer Pricing is the setting of the price for goods and services sold between controlled/related legal entities. It is generally aimed at depicting favourable performance of a conglomerate by shifting earnings from a high tax jurisdiction to a low-tax one....

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Posted Under: Income Tax |

Draft scheme of proposed rules for computation of ALP

F. No. 134/11/2015-TPL (21/05/2015)

The Finance Minister in his Budget speech, while introducing the Finance (No. 2) Bill 2014, had made an announcement that range concept for determination of ALP would be introduced in the Indian transfer pricing regime however, the arithmetic mean concept will continue to apply where the number of comparables is inadequate. ...

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Specified domestic transaction audit limit raised to Rs. 20 crore

Raising the threshold for specified domestic transaction In a second blow to Chartered Accountants FM has raised Limit for Audit of Specified Domestic Transaction to Rs. 20 Crore from Rs. 5 Crore with effect from Assessment year 2016-17. This may effectively take 90% Assessees out of Ambit of  Transfer Pricing Audit of Specified Domestic...

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Posted Under: Income Tax |

Safe Harbour Rules for Specified Domestic Transactions of Govt. Electricity Cos

Notification No. 11/2015 - Income Tax (04/02/2015)

Notification No. 11/2015 - Income Tax 10THA. Eligible assessee.—The 'eligible assessee' means a person who has exercised a valid option for application of safe harbour rules in accordance with the provisions of rule 10THC, and is a Government company engaged in the business of generation, transmission or distribution of electricity....

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An Year with Specified Domestic Transaction (Transfer pricing)

The Income Tax Act 1961(‘The Act’) as amended by Finance Act 2012 brought specified domestic related party transactions (SDT) within its fold with effect from FY 2012-13 vide section 93BA of the Act and admittedly as with any new legislation, there were very few early adopters. SDT provisions principally have impact in two ways, first...

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Posted Under: Income Tax |

Transfer Pricing with inclusion of Guidance Note & OECD Guidelines

The obligation of an enterprise to keep and maintain records and documents vis-a-vis the duty of revenue authorities to verify about the compliance with the arm’s length principle has been succinctly stated by the OECD in their Transfer Pricing Guidelines:...

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Posted Under: Income Tax |

Transfer Pricing Law in India

Tarun Gulati Earlier, India was isolated from the world markets and it went global only in 1991 with the change in policies for Foreign Trade, foreign direct investments, etc. This move towards globalization brought in new requirement for changes in the taxation and other laws as the MNC’s started investing in India and acquisition of [...

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Posted Under: Income Tax |

Ignorance of law in not furnishing Section 92E Report – whether a reasonable cause for not levying penalty

Under section 92E, every person who enters into an international transaction during a previous year is required to obtain a report from a chartered accountant and furnish such report on or before the specified date on the prescribed form. Rule 10E provides that the auditor’s report shall be in Form No.3CEB....

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Posted Under: Income Tax |

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