Draft Rule 87 of the Income-tax Rules, 2026 specifies categories of eligible assessees and lays down stringent low-risk conditions to ensure certainty and simplified compliance under safe harbour transfer pricing rules.
Rules 85 and 86 of the Draft Income-tax Rules, 2026 mandate accountant certification for international and specified domestic transactions and define key terms for safe harbour rules. The provisions aim to standardize reporting timelines and clarify eligibility criteria for transfer pricing compliance.
Draft Rule 84 of the Income-tax Rules, 2026 requires taxpayers entering international or specified domestic transactions to maintain extensive contemporaneous documentation to substantiate arm’s length pricing and avoid disputes.
Draft Rule 83 of the Income-tax Rules, 2026 mandates a 90-day repatriation deadline for excess money arising from secondary transfer pricing adjustments, failing which imputed interest is levied at prescribed benchmark rates.
Rule 82 allows assessees to determine arm’s length price for two additional consecutive years in a single transfer pricing proceeding, provided strict similarity and compliance conditions are satisfied. The key takeaway: the option is available only where transactions, methods, and functional profiles remain materially unchanged.
Draft Rule 80 prescribes criteria for selecting the most appropriate transfer pricing method based on transaction nature, comparability, data reliability, and functional analysis.
Draft Rule 79 sets out recognized methods and comparability criteria for determining arm’s length price under section 165, mandating use of the most appropriate method and current-year data for accurate benchmarking.
Draft Rules 77 and 78 clarify essential transfer pricing definitions and allow an alternative comparability-based method for determining arms length price. The provisions expand scope while enabling practical pricing based on similar uncontrolled transactions.
Draft Rules 75 and 76 prescribe mandatory forms, timelines, and verification requirements for claiming treaty relief and foreign tax credit, limiting credit to actual tax liability and disallowing unsupported or disputed claims.
Draft Rule 74 permits specified persons to defer taxation of income accrued in foreign retirement benefit accounts until withdrawal in a notified country. The option, once exercised in Form 40, is binding and subject to reversal if residential status changes.
