Transfer Pricing

“This practice is regulated by tax authorities to ensure that transactions between related parties are conducted on an arm’s length basis, meaning that the prices are set as if the parties were unrelated. The Income Tax Act, 1961, contains specific provisions related to transfer pricing under Sections 92 to 92F. These sections require taxpayers to determine arm’s length prices for transactions with associated enterprises and maintain detailed documentation to support their transfer pricing policies. It covers International Transaction and Specified Domestic Transaction.”